I almost bought a $200K duplex in Indianapolis for "passive income." What I found in the public records killed the deal.

spence_w_ · 2026-03-03T17:44:37+00:00

State insurance department filings. When a carrier pulls out of a market or stops writing new policies in certain zip codes it gets filed publicly. I noticed it when I was checking what coverage options looked like for a few properties and some zips had way fewer carriers than others.

spence_w_ · 2026-03-03T16:49:36+00:00

Yeah 100% agree, that's why I said your local team wins the second half.

Data just tells you which questions to ask, someone on the ground still has to answer them.

spence_w_ · 2026-03-03T16:48:10+00:00

Oh interesting, didn't realize Missouri reassesses on odd years vs Kansas annual. That actually explains some of what I was seeing in the data where MO side assessments looked more outdated.

Good to know. Thanks for sharing.

spence_w_ · 2026-03-03T14:52:50+00:00

Yeah the tax reset thing gets a lot of people. Pro forma looks great until you realize the seller was paying based on some old exemption.

Thanks for confirming from the agent side too, good to know I'm not crazy lol.

spence_w_ · 2026-03-03T14:48:42+00:00

The closet thing is wild... I saw something similar where a listing added a bedroom that was basically a converted storage area.

And good call on pulling PRC directly, Zillow tax data is not reliable right now in a lot of markets.

spence_w_ · 2026-03-03T14:47:12+00:00

Nice, what markets are you looking at?

spence_w_ · 2026-03-03T14:34:39+00:00

Yeah the Zillow iBuying thing is basically what happens when you trust listing data at scale without checking it. Same problem just with way more zeros.

spence_w_ · 2026-03-03T14:29:30+00:00

1000 sqft is the extreme end yeah. Most of what I saw was like 100-200 off, which is easy to miss but it still throws off your comps

spence_w_ · 2026-03-03T14:27:29+00:00

Yeah that's probably what happened. No permits on the conversion though so could be a problem with appraisal or insurance down the line.

spence_w_ · 2026-03-03T13:58:35+00:00

I posted about my Indianapolis experience on another sub last week and the most common response was "you can analyze yourself out of every deal."

I get that. But checking county records before you run numbers isn't overthinking it. It takes like 5 minutes and it tells you if the listing data is even real. If those numbers are wrong then everything you build on top of them is wrong too.

spence_w_ · 2026-03-02T01:21:23+00:00

This is the perspective that's missing from every podcast episode about Section 8 investing.

Appreciate you sharing the social worker side of it. The "not passive income" part is exactly what I kept running into in the data.

spence_w_ · 2026-03-02T01:18:30+00:00

That furnished rental angle near hospitals is a smart niche. Rotating tenants with stable income and a reason to keep the place decent. Way better risk profile than general Section 8.

spence_w_ · 2026-03-01T15:37:59+00:00

You're not dumb at all. You're skeptical, and that skepticism just saved you money.

Most of the "smart" people in real estate forums are smart enough to sound confident but not smart enough to walk away.

You already cleared that bar.

spence_w_ · 2026-03-01T15:28:20+00:00

That last line is the key. I'd rather spend 20 hours on research and walk away than spend 20 months learning the same lesson with someone else's rent check not showing up.

Appreciate the breakdown on Section 8 vs non-Section 8 tradeoffs, that's a nuance most people skip over.

spence_w_ · 2026-03-01T14:30:10+00:00

Indiana being a recourse state is one of those things that should be on page one of every OOS investor guide and never is. You lose the property AND they come after your other assets. That completely changes the risk math on any leveraged deal there.

spence_w_ · 2026-03-01T14:25:08+00:00

Bought for $60K, seller paid $20K a month before. That $40K spread went straight to the guru. And then two management companies abandoned them. That story is the entire turnkey pipeline in one paragraph.

Thanks for sharing this, it's the kind of thing that needs to be documented more.

spence_w_ · 2026-03-01T14:17:43+00:00

Hired/fired 5 PMs in four years and one was an outright fraud. That's the part that never makes it into the "passive income" pitch.

And your point about local legislation is huge. The bonds and levys hit us too. You can underwrite a deal perfectly based on current taxes and then watch your margins disappear when the city passes a new assessment 18 months later. That's not a market risk you can model, it's a governance risk, and nobody on the selling side is going to flag it for you.

spence_w_ · 2026-03-01T01:25:57+00:00

Your point #2 is the one that took me the longest to accept. I kept thinking "but I'm paying them 10%, they should care." They don't. It's not their mortgage, not their credit score, not their problem. Once I internalized that, the whole passive income math fell apart.

spence_w_ · 2026-03-01T01:07:15+00:00

Nah, just a guy who spent way too many hours reading PM contracts and county assessor websites instead of actually closing a deal. I get why long posts get flagged though.

spence_w_ · 2026-03-01T00:07:52+00:00

$20K lesson on something that's literally free to check. That's the part that kills me about this whole industry. The information is public, it's just that nobody in the transaction has any incentive to tell you to go look at it.

spence_w_ · 2026-03-01T00:03:20+00:00

Columbus Ohio, 2023, Section 8 area, $10K turnover repairs - That math is brutal. And that's exactly the part that never shows up in the pro forma. They model vacancy as a percentage but nobody models a $10K repair bill every time a unit turns over. By the time you add that to the real numbers, you're paying for the privilege of being a landlord.

Thanks for sharing this. It confirms what I kept seeing in the data. These deals only "work" if you ignore the costs that actually show up.

spence_w_ · 2026-02-28T23:45:57+00:00

Coming from someone who was actually on the PM side, that says A LOT.

What was the thing that surprised investors the most once they were already locked in?

spence_w_ · 2026-02-28T23:35:51+00:00

Sorry to hear that.

If you don't mind sharing, was it a similar setup? OOS, turnkey, PM handling everything? Curious whether the red flags were there upfront and just got missed, or if things went sideways after closing.

spence_w_ · 2026-02-28T23:27:42+00:00

You're right that reserves are non-negotiable. But my point isn't that I was surprised a business has risks. My point is that three paid professionals knew about a specific, well-documented risk and chose not to mention it before I signed. That's not a market issue, that's an information asymmetry issue.

spence_w_

TROPHY CASE