The Investor’s Guide to Grading Indianapolis Neighborhoods

2 min read
Sterling White

Sterling White is a multifamily investor, specializing in value-add apartments in Indianapolis and other Midwestern markets. With just under a decade of experience in the real estate industry, Sterling was involved with the management of over $10MM in capital, which is deployed across a $18.9MM real estate portfolio made up of multifamily apartments. Through the company he founded, Sonder Investment Group, he owns just under 400 units.

Experience
Sterling is a seasoned real estate investor, philanthropist, speaker, host, mentor, and former world record attemptee, who was born and raised in Indianapolis. He is the author of the renowned book From Zero to 400 Units and the host of a phenomenal podcast, which hit the No. 1 spot on The Real Estate Experience Podcast‘s list of best shows in the investing category.

Living and breathing real estate since 2009, Sterling currently owns multiple businesses related to real estate, including Sterling White Enterprises, Sonder Investment Group, and other investment partnerships. Throughout the span of a decade, he has contributed to helping others become successful in the real estate industry. In addition, he has been directly involved with both buying and selling over 100 single family homes.

Sterling’s primary specialities include sales, marketing, crowdfunding, buy and hold investing, investment properties, and many more.

He was featured on the BiggerPockets Podcast episode #308 and has been contributing content to BiggerPockets since 2014, with over 200 posts on topics ranging from single family investing and apartment investing to mindset and scaling a business online. He has been featured on multiple other podcasts, too.

When he isn’t immersed in the real world, Sterling likes reading motivational books, including Maverick Mindset by Doug Hall, As a Man Thinketh by James Allen, and Sell or Be Sold by Grant Cardone.

As a thrill-seeker with an evident fear of heights, he somehow managed to jump off of a 65-foot cliff into deep water without flinching. (Okay, maybe a little bit…) Sterling is also an avid kale-eating traveller, but nothing is more important to him than family. His unusual habit is bird-watching, which he discovered he truly enjoyed during an Ornithology class from his college days.

Education
Sterling attended the University of Indianapolis.

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When investing for cash flow, Indianapolis is an attractive market. Due to the affordability, diverse economy, and abundant inventory, more investors are buying up properties from out-of-state to maximize returns.

Before taking the plunge, though, be sure to do your research and familiarize yourself with the market. This goes for locals, too.

Map Key

  • DARK GREEN: A neighborhood
  • LIGHT GREEN: B neighborhood
  • YELLOW: C neighborhood
  • ORANGE: C/D neighborhood
  • RED: D neighborhood

Here’s my perspective on Indianapolis neighborhood grades from my years investing in the market along with being native to the city. Click here to take a closer look at the interactive map.

A-Class

A-class neighborhoods are primarily owner-occupied single family homes. The school systems are top notch. These single family homes start at $200k and up. They are expected to achieve lower returns compared to B, C and D neighborhoods, but this is offset by higher quality tenants, along with less management involvement. 

  • Carmel—Median income: $106,456 (zip: 46032, 46033, 46082)
  • Fishers—Median income: $97,100 (zip: 46037, 46038, 46085)
  • Zionsville—Median income: $118,190 (zip: 46077)
  • Meridian Hills—Median income: $141,563 (zip: 46220, 46240, 46260)
  • Westfield—Median income: $90,048 (zip: 46074)
  • Noblesville—Median income: $70,276 (zip: 46060, 46061, 46062)
  • Avon—Median income: $93,116 (zip: 46123)
  • Greenwood—Median income: $52,621 (zip: 46142, 46184)

Related: How Investors Get Burned Following the 2% Rule in Low-Income Neighborhoods

B-Class

B-class neighborhoods are going to be made up of a variety of both rentals and owner-occupied homes. Here you still see more owner-occupied homes overall. You will be able to find single family homes that need little work and get solid rental rates. Residents will include some education beyond high school and some blue collar workers. A very solid tenant base will live here. Rents will be around $800-$1,050.

  • Brownsburg—Median income: $68,647 (zip: 46112)
  • New Palestine—Median income: $66,711 (zip: 46163)
  • Plainfield—Median income: $61,140 (zip: 46168)
  • Southport—Median income: $51,762 (zip: 46227)
  • Whiteland—Median income: $56,944 (zip: 46184)
  • Clermont—Median income: $58,846 (zip: 46234)
  • Irvington—Median income: $60,231 (zip: 46219)
  • Bates Hendricks**
  • Fountain Square**—Median income: $38,366 (zip: 46203)
  • Broad Ripple**—Median income: $90,753 (zip: 46220)

**In recent years, Fountain Square has been experiencing gentrification driven by Millennials and has become a very hot part of town. You can find homes valued at $50k right next to $350k new construction. Bates Hendricks, just blocks away, is going through this phase as well, although it is a couple years behind.

**Broad Ripple can be considered an A neighborhood as much as a B. Very mature setting.

C-Class

C-class neighborhoods are going to be made up of about half and half renters and owner-occupants. Rents will run between $600-$800. The residents will be mostly comprised of blue collar workers. These, along with neighborhoods in B-class areas, are by far my favorite to acquire property in.

  • Speedway—Median income: $40,499 (zip: 46224)
  • Mooresville—Median income: $52,768 (zip: 46158)
  • Lawrence—Median income: $48,731 (zip: 46216, 46218, 46220, 46226, 46235, 46236, 46250, 46256)
  • Beech Grove—Median income: $37,624 (zip: 46107)
  • Martinsville—Median income: $36,379 (zip: 46151)
  • Eagledale—Median income: $26,233 (zip: 46222)
  • Little Flower—Median income: $39,298 (zip: 46201)

D-Class

D-class neighborhoods are going to consist of more rental homes. There won’t be many owner-occupied single family homes. Abandoned homes in these neighborhoods are more likely to get broken into when sitting vacant. These areas are generally not very safe and are highly management-intensive due to tenant volatility. Investors beware: Having local boots on the ground to manage is recommended. Money can be made here, but the risk increases. Rents run between $450-$700.

  • Haughville—Median income: $17,321 (zip: 46222)
  • Martindale Brightwood—Median income: $25,865 (zip: 46202, 46218, 46205)
  • Brookside Park—Median income: $38,039 (zip: 46201)
  • Grace Tuxedo—Median income: $29,114 (zip: 46201)
  • Willard Park—Median income: $29,114 (zip: 46201)
  • Mars Hill—Median income: $32,254 (zip: 46241)

I would enjoy hearing others’ insights as well.

*All median household figures were pulled from multiple reputable sources such as bestplaces.net and city-data.com.

How would you rate these neighborhoods? How is your experience investing in them?

Comment below!