How to Invest $50k in Indianapolis... (CHEAT Code)

I love helping people buy real estate, but I keep watching investors, especially out-of-state ones, sit on the sidelines and analysis paralysis trying to wholesale or flip their way to millions. Stop. Here's the actual plan. At Roots, we help [music] investors do this every month. 500 homes in 3 years. I'm pulling up three real properties that are for sale right now [music] and mapping out the full 12-month plan on paper. By the end, you'll know the exact playbook. A BRRR, a flip, and a turnkey rental. Let's get into it. Why Indy? Well, the median home here is $250,000 versus 400k nationally. The math works here. It just simply doesn't where you live. Rents sit about 1,300 to 1,500-ish on a three-bed. You can still hit the 1% rule. There's lots of jobs coming. Lilly just dropped 9 billion, Salesforce over 220 million, Amazon over 11 billion, and prices just haven't caught up yet. And that's all I'll say about Indy for now. Let's get into how you actually get the deals. Before you load up Zillow, you have to build the team. We need the squad that's going to help you break down your deals. The first guy, I won't say that they're the most important, but they're probably the most handsome, which would be me, the agent. And then, you need to go out and you have to find a great contractor. You don't want to call the guy on Angie's List the day that you identify a property and you're like, "Hey, can you look at these Zillow pictures before I write an offer and tell me how much the reno would be?" The guy tells you a 50 and it actually is a 100, well, you just lost 50 grand. So, get a good contractor that you like. Next up, your PM company. After all, they're going to be the one that's leasing the place out, which like tenants make or break a deal. So, you want to find somebody that you know, like, and trust and can build a good relationship with. You want your PM to care more about your property than you do if they're going to be the ones watching it, right? Like, I find people when I go out of town that love my dogs, like actually like really, really the guy that watches them, he's obsessed with them and he wants to spend time with my dogs. I do that and don't take them to a kennel cuz I want them to be loved while I'm gone. Same with your property. Find somebody who cares about your deal as much as you do. And then last up, this one can be I don't know. You can exchange them in and out. Everybody has their different ideologies. I'll tell you, maybe it's a sin, but I pick one lender and I've stuck with them. Do I get the best rates every time? I don't really know cuz I don't shop. Use your own discernment if you want to shop. Shop it, agent that's sick. Maybe give him a little green hair. All right, that's enough. Let me show you the deals. So, property number one that you're going to pursue is going to be a BRRR property. You're going to buy it, you're going to renovate it, you're going to refinance, you're going to rent it out, and then uh you're not going to really repeat it. So, we're just going to do the sort of the BRRR. We're going to do the BRRR. And I know on this YouTube channel at some point I have bashed this strategy and said that it doesn't work in Indianapolis because it doesn't. It doesn't work anywhere. Every single letter that's represented here times the miles that you are away is the difficulty. So, the buying is at 500 times more difficult if you're 500 miles away, and then it goes 1,000 times more difficult, then 2,000, then 4,000. Level of difficulty increases as you get further down the strategy. Why you're going to start with this is because if you go for a full gut flip to try to take your, you know, 50K in savings that you might have and turn it into 100 to then buy turnkey rentals and build a portfolio, you will get steamrolled by not having an asset at the end of that or at least going after the flip with the intention of keeping it in a portfolio. The reason why I'm recommending going after a BRRR first is cuz I truly believe the only way to build wealth in real estate is to add value. And do I think you have to refinance at the end of this? No, but if we can get cheeky and find you a deal that works, that's awesome. But if you have 50 grand in your bank account and you're thinking about going straight after a flip for the first time, I think you'll get steamrolled by not going into it with the intention of selling it after you get done with the renovation because you're going to swing that bat so flipping hard at the ball that it's just going to whiz on by. So, there's my heavy preface on the first step of the strategy. Let's get into an actual listing. Pause. A quick break from the episode. The lender you choose will make or break your experience. That's why our team at Roots consistently works with Renato Lima from Approved Mortgage. He communicates clearly, moves quickly, and understands both retail and investment loans at a high level. When my guy Renato's on the deal, things move steady. When you get serious about buying, click the link in the description and contact Renato today. Property number one, we'll pop it up on the screen. It's 118 West 36th Street. It's on the market right now. Immediately what you're going to notice is the tree that's smashed into the garage and the side of the house. That's what we want. We want something that we can add value to. The secondary thing that you're going to notice in the walk-through video is that this property doesn't look half bad. Cuz honestly, you can move a tenant in here tomorrow, no problem. Just with a nice little clean and getting the tree removed and the roof fixed. The reason why this is a perfect property and something that you want to look at is because it's not a full gut renovation. It's an easy Tuesday for you and for your contractor. You're going to call him up and say, "Hey, I'm going to buy this house for 130 grand and I'm going to spend $50,000 on a renovation." As long as the tree's not sold separately with the house, this is going to be a good deal. You're going to get your contractor in to spend 50 grand on the reno. All you have to do is remove the tree. You have to make it look great. So, when the appraiser comes by for your ARV, we need to get it up to about 200K-ish, which honestly, I don't see it being that much of a lift. So, anytime that we're trying to bur a property, the whole entire goal is that you're buying it for less than 25% down, right? Or else you should just go buy a turnkey rental. We're adding value to force appreciation, which means logically, you're going to use hard money and then a refinance is going to happen. So, you're going to get a 130K purchase price. 50k, you're going to ask them for 50k for the reno. Means 180k loan, but you're going to put 10% down on this. It'll be 18 thousand dollars in. Meaning you'll have a loan amount around the like 162 165k ranges, just depending on fees, but we'll call it 162 for gigs. There we go. It's a good K. I believe you can hit the 200k ARV here. We're going to times that by 20%. Times . 2 equals 40k for a down payment after the renovations happen, the appraisers come in, you've buttered them up, he's got you the good price. That means that you are left with 160k on a loan. So, you're putting the 40 in from your original, you actually get 2k back on the refinance. You might have to pay the lender 3 grand, so you're breaking even. But, guess what? You forgot. You already put the 18 in, so there's equity in the deal. You just bought this house for 20 grand, all set in, when you normally would have had to buy it for 14. But wait, we missed the best part. What's it going to rent for? Well, it'll rent for like 1,700 or more, maybe furnish it out, you could get over 2,000 if cash flow's your thing. But ultimately, our goal was to buy properties and get off the sideline. This got you in the game and it kept, you know, the original 50 that I was talking about that you have in your pocket. Well, now you have 30 to go after the next one. So, what is it? Let's get to property number two. The flip. 1024 North LaSalle Street. We'll pop it up. Immediately, what you're going to notice is like, wait, this doesn't look that bad from the outside. Well, yeah, right. Remember I told you, you don't want to get your hands too dirty. You got the BRRR successfully done, you've proven that you can add some value. So, now we're going after a flip, but we can't go to the Meridian Hills and try to do a million dollar mansion. We got to go to 10th and LaSalle, baby. We're going right off North Roll in the heart of the East Side. This is your cash injection though, because you're down to 30 grand. We got to get you back up to that 50K basis to attack property number three. This one has 140K asking. I'll tell you a little secret to all the flippers out there. They only make their money on the negotiation on the front end. You're going to talk this guy down to 120K. Yes, counterintuitive, I'm wrapping the seller. Sorry, Connor. You're going to do 30K in reno. You've built a rapport with that hard money lender. He's not going to want a down payment at this point, but he is going to charge you like 8K in holding costs. And I'm going to be honest with you. This one's probably going to take you like 4 to 5 months to get done just because you're not that skilled and you're probably not that much of a priority to your contractor. I'm just being honest. I've been there where I'm like, "Come on, guys. Can we get this thing going?" Well, they've got other people that are doing other things, right? At the end of this thing, you can sell it for 200K. You'll pay your agent, do all that stuff. You're probably going to net like 185, but all in I'm looking at, you know, on a worst day netting 185 equals guess what? 30K. I know, it's not going to change your life, but it gives us bullets back in the chamber to attack property number three. And this is my favorite. Quick break for a second. If you are doing any kind of renovation work in Indy, you already know finding the right vendor partners is half the battle. It might be the entire battle. Best Flooring is one of those partners for us. Phil Nelson and his crew offer the best selection out there. From a single bathroom refresh to a full gut job. Check them out at Best Flooring on Lake Plaza Drive. Use Apple Maps to get there or Google Maps, whichever one of your choice. Phil's got floors and you need them. Call them up. This is my favorite because it's the turnkey. I don't usually advise buying a property with tenants in it. And honestly, whenever I look at turnkeys, I'm going after something that has tile in the bathroom, you know, butcher block or granite in the counter. And I want to be able to place my own tenants. But I saw this one and you just can't pass it up. 2428 North Arlington Ave. Pop it up. Yeah, 99k asking price and it's rented for 1225. This one cash flows. Going to throw 25% down, which means you're in for 25k. Easy math when the property's $100,000. And your loan's going to be like in the 70s. I actually am not in real estate factoring. Not sure if anybody can do a DSCR loan under 100k. I'm like I'm pretty sure that that is the the limit. You might have to get somewhat creative but I don't know. The it's it's business. I bet they'll take it. You have a 75k mortgage and you're going to be cash flowing from day one because it the tenant's paying 1200 bucks. That'll help make up for all of you that on property number one ready to swipe out of the video because it wasn't cash flowing after you did your BRRRR. And that'll make up for the portfolio cuz now you have two properties. One that's like kind of breaking even every month and then you have your cash cow. So what the heck just happened over the last 12 months? Well, you have two rentals that you only put like 15 to $20,000 in and you're sitting cozy with $60,000 plus in equity and you're cash flowing on paper like 600 ish per month. And they say real estate investing is hard. Well, let's be real. I've done this strategy myself in a year and the way that it ended up shaping out was I probably spent more like 30 to 45,000 in cash, but I started with 50 legitimately. And I was able to turn that into two turnkey rentals by searching really hard for good deals and not going after the biggest, baddest renovation ever to force all this appreciation. Those properties two years later are close to like 150 grand in equity for my portfolio and I could go and just disperse those out and buy more houses or upgrade them and keep the chips on the table for better ones. But what do you do with that other 25 grand that you had? Well, guess what? There's another 12 months ahead. It's the next year. Just rinse and repeat. If you do this every year for the next five, you're going to have 10 doors when you were probably struggling to figure out how to even break in and buy the first one. Every deal I showed you today is real. They were real addresses, real asking prices, and if you're in another state watching or in my backyard and you think that you could probably actually do it, I know you can. Hit the link below, book a call with me or Tyler, another member of our team. Let them know that you came from the podcast. And if you're not ready for a call, drop a comment about your situation. Tell me how much you have in your bank account, what you're striving for, and what your next 12 months look like. Subscribe so we can stay along each and every week. We drop full episodes of the podcast with guests around here. One of them has like $5 in rentals. You should go check his episode out. And we'll see you on the next one. Peace.