Flash From the Past

When I began investing in rental properties here in Indianapolis, I usually communicated with my tenants via phone (land line) or in person. To make my life easier, I got a pager. When my tenants had questions or a repair issue, they could call my pager, and I’d see their phone number on the read-out.

That was the easy part. The hard part (before cell phones) was finding a pay phone in the area so I could call them back. Typical scenario:

  • I’m working at one of my empty rentals, trying to get it rent ready. It’s the middle of winter, and there’s 8 inches of snow on the ground.
  • I get a page from one of my tenants.
  • I go to the pay phone a few blocks from where I’m working.
  • I put my quarter in — yes, a quarter — and the phone eats my quarter. I try it again. Same result.
  • I go to another pay phone, a few blocks from the first one.
  • I put my quarter in. I get a dial tone — yay! But the push buttons are frozen and I can’t dial out.
  • I go to a third pay phone, and there’s a handset in the holder, but the cord is missing.
  • I abort the mission entirely, and decide to just call them when I get back home.

I think back on those days, and I’m soooo grateful for the technology that allows us to communicate through so many platforms — email, text, and all that’s made possible  through cell phones. Everyone has one, including people who work minimum wage jobs.

Technology … it’s simplified my life and my business. Love it!

The Case for Investing in Low-Middle Income Rentals

Since the collapse in the housing market almost 10 years ago, we’ve seen a steady increase in the demand for rental properties. Here are some startling facts:

  • In this time frame, the number of rental units has soared from 34 million to 43 million, in 2015. By 2025, it’s expected to top 46 million.
  • The largest percent of that growth — 80%! — has come from the conversion of single family homes into rental properties.
  • Demand has grown in all income ranges, but particularly in households earning less than $100,000/year.
  • Because of the rising demand, rents are going up, while incomes are not keeping up. Renters are spending a larger percentage of their take-home pay toward their rent payments than ever before. But even so, we’re expecting continued growth in our rental markets throughout the US.

With no end in sight for the continuing demand on rental properties, investors are diversifying their portfolios and putting their monies in real estate. Indianapolis is a very desirable rental market; our economy is growing, yet our prices are reasonable compared to the rest of the country.  We have investors from all over the world who’ve decided this is the place to be … especially in the low/middle income markets, there are still great returns to be made.

Onward and upward!


Rental Property Myths

When people ask me about owning and managing my Indianapolis rental properties, I get the same questions/comments again and again. Here are the most frequent  myths I respond to:

  • “I’ll bet you’re always getting calls in the middle of the night!”  No, in my 21+ years of doing this, it’s rarely happened. Yes, I’ve received calls on the weekend and/or in the evening, if someone has an emergency, like if a furnace goes out. But fortunately, I have my trusted contractors to call, and they can take it from there. I’m not making trips to my rentals on those calls. And if it’s something minor (which it sometimes is) I have them wait until the next working day.
  • “Don’t you get tired of your tenants totally trashing the places?”  Well, I’ve had tenants leave trash behind after a move-out, for sure. When I’ve evicted a person, sometimes they take what they need, and leave the rest. This happens more often in the lower economic demographic. But as far as vandalizing/destroying the apartment, out of anger or resentment, no. If you treat your tenants with respect, this doesn’t occur.
  • “I’ll bet you’re making a ton of money!”   Uh, no … When you buy rental properties, you’re buying for income, yes, but also for long-term investment. It’s not a “get rich quick” proposition. If you’re buying with a loan, you want to make sure your rent will cover more than your loan payment and other expenses (i.e. taxes, insurance, utilities, etc.). You can make a “ton of money” if you buy a ton of rentals, for sure. But the commercials you see on TV are totally exaggerated! Don’t buy into that crap!
  • “You’re a slave to those properties…you don’t have a life of your own!”  That depends on a couple things: if you fix them up well in the first place, you shouldn’t have many major repair issues going forward. And also, you have the option of hiring out the management if you don’t have the desire, personality or time to do it yourself. The cost per month is usually 8-10%/monthly rent, plus a percent of the first month’s rent. But beware — good, honest property management is hard to find.

So there you have the comments/questions I get most often — all myths. This business is intricate, demanding, frustrating, and very rewarding. I don’t regret beginning my journey all those years ago, and I do my best to educate others before they jump in. It isn’t for everyone, but for many, it can be part of a smart, long-term investment strategy.

Onward and upward!  :-))



Saw this contraption on the way to one of my Indianapolis rental properties. Whaaat?


I imagine it’s some type of heat source, being vented right through that window and up the side of the house. Wow …

I’m surprised the Board of Health hasn’t tagged this owner and sent a threatening letter. Crazy! If this is the scene outside, I can only guess what’s going on inside!

Before You Buy …

When new investors consult with me about getting started in the rental business, the first question they usually ask is, “How do I know where to buy?”  After I ensure they have the finances for the purchase figured out, my answer is pretty straightforward:

1)  Make the property within a 30-minute drive from your home.  Gas is expensive, and if you buy a fixer-upper, you’re going to be spending enough money on the rehab without driving all over town to get there!

2)  Check the schools and amenities in the area.  Good schools and access to conveniences and the bus line attract renters and enable you to charge higher rent.

3)  Stop in at the local police station and get a crime run covering the past year.  Petty stuff like theft or disturbing the peace isn’t a huge deal, but if you see armed robbery, stabbings, drug crimes and worse, run!

4)  Drive your chosen neighborhood at various times of day … morning, noon, evening, weekends.  Notice who’s walking the street and “out and about.”  What do the residents’ vehicles look like?  How about the residents themselves?

5)  And lastly, TALK to people.  It’s incredible what you can learn this way.  Talk to neighbors, tell them you’re considering buying a home there (don’t tell them it’s going to be a rental … some may suspect you’re a slumlord).  Stop in at a local restaurant/bar and speak with a server or bartender who’s been there a while.  They’ll be a wealth of information … they may tell you more than you want to know.  LOL.  But that’s okay, you’re on a fact-finding mission.

If you do your “due diligence” prior to the purchase, you won’t suffer buyer’s remorse when the deal is closed.  It’s worth the time spent, trust me.

And, happy hunting!  🙂

Take This Stuff Out!

It’s not easy running a rental business on your own.  One of the biggest challenges is rehabbing your home(s) according to what your tenant mix demands.

A piece of advice, if you’re into lower income rentals:

Most people in the lower income demographic are looking for something clean and affordable.  Period.  I always supply stoves and refrigerators, but I never hook up the ice makers in the refrigerators.  They leak, malfunction, and aren’t worth the hassle.  Ice cube trays work just fine!

Another item I don’t install is garbage disposals.  People try to put crazy stuff in them.  The unit jams up or just quits altogether.  Another repair/replacement issue!  Not worth the hassle.

And lastly, take a pass on the sink sprayer.  Tenants tend to be rough with them.  They’re easily broken, they leak … again, not worth installing.  You can buy a “plug” for the hole where the sprayer goes.

Even without the above items, my units compare extremely well to the competition, because they’re super clean, including fresh paint and nice flooring, and they’re accompanied by an attentive landlord!

As I work my way up on the income scale, I add amenities … high-end counter tops, flooring, and other accessories.

This may seem elementary, but I’ve seen too many real estate investors buy their first rental and pour way too much money into the rehab … you must make it attractive to your market, nothing more, nothing less!

Onward and upward …. 🙂

Foster The Change

Many of the rentals I personally own are in the inner city of Indianapolis.  I bought there, back in the 90s, because of a government program called “Weed and Seed.”  Law enforcement was teaming up with community, educational and spiritual leaders to rid blighted areas of drugs, prostitution, gangs and the crimes that accompany them.

Indianapolis (Haughville area, to be exact) had tremendous success with the program, and was used as a national model for “Weed and Seed.”  While there are still issues with poverty and crime, I’ve seen progress.

I’ve tried to carry that progress into my personal journey with my rentals, by carefully choosing tenants, and being a strong, positive presence in the neighborhood.  Part of this is accomplished by putting responsibility and accountability on my tenants.  They’re required to keep the yard and garbage areas clean, and their apartments clean inside. 

I’ve also encouraged other landlords to jump on board by improving their properties and tenant mix.  This is how neighborhoods turn around … I urge my tenants to watch each others’ backs, and to keep an eye on suspicious activity and report it to the police immediately.  When authorities know the residents care, they’re more likely to respond.

Improving my rentals puts a better face on the neighborhood, and when I see others doing the same, I always stop and compliment them on the “facelift” in progress. 

Slowly but surely, as residents feel a sense of pride and community, blighted neighborhoods can make a turnaround.  Be part of the change … the reward may come slowly, but it will come.

Onward and upward! 

May 2014 bring you all good health, happiness and prosperity! 🙂



The American Dream Revisited

When people ask me about buying rentals in Indianapolis, I like to tell them stories like this one.

Back in 2005, I found a cute three-bedroom foreclosure and bought it for $26,000.  It didn’t need a lot of work, really.  The basement was full of junk, the place smelled like dog urine (it made my nose and eyes burn) and the previous owners had left trash all over the house.  It needed to be totally redone but it was structurally sound, and the major operating systems were in good shape, as was the roof, siding and garage.  So I jumped on it.

It didn’t take long to complete the rehab . . . I planned ahead and got it done quickly, spending about $5000.   After the purchase, every day that goes by is a day I’m not making money, so I organize myself and my sub-contractors and get the rental up and running.

My first tenants wanted to be buyers, so Idid a land contract with them, also called a “rent-to-buy.”  It didn’t work out — they defaulted — so I got them out and rented to a wonderful guy who’d fallen on hard times.  Bill had been in an accident and wasn’t able to work for two years, due to multiple major surgeries.  He tried to keep up with medical bills and just couldn’t.  He ended up losing his home, etc.  But now he was back on his feet (literally) and had a good job. 

I started renting to him about two years ago and he called yesterday and asked about the possibility of buying the house, below:

Of course, my first question had to do with his credit situation.  Bill told me he had been working on credit restoration, and also that he was going to receive clost to $20,000 in monies (disability payments) that were owed to him from the time he was injured and out of work.  He wanted to know how much I’d charge him for the house so I did a quick review of comps in the area —  comparable homes for sale and sold in the area — and came up with a $50,000 price tag.  I felt this would hold up to an appraisal by a bank.  So, he’s working on it from his end, and we’ll move forward.  He’s excited and so am I.  I’ll take that money and run!  Maybe pay down some debt, buy another rental . . . we’ll see.

But, I’m so happy for him.  For Bill, the American Dream is alive and well.  This is why I love what I do . . .    🙂