Indianapolis vs Kansas City - Turnkey Investment

Indianapolis vs Kansas City - Turnkey Investment

Real Estate Agent · Los Angeles, CA · Member since 2017 · 125 posts · 37 votes

Hey everyone,

First time investor here. I've narrowed down the cities I'm looking to invest into two areas. As title states, Indianapolis and Kansas City. I did a thorough research with the statstics on both regions, and it appears that both have its pros and cons. I'm hoping to gain insights and opinions from out of state investors who have experience with both regions. There could be many factors that can be brought up like taxes, insurance, cash flow, Cash on Cash, vacancy rate, etc, but what's most important to me is working with a PM that is responsible, savvy, and communicative. Nothing against KC, but I did hear that Indy TKP are more responsive and act quicker. I consider communication as one of the important aspect in moving forward.

I plan on working with a turnkey provider and have been in contact with few so far. Also I just booked my flight to Indy for March and would love to connect with people from the region as well. Hope it warms up by the time I get there :) Thank you BP community!

James (Kee June) You

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Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes

9y

Well, a word of caution, turnkey PMs are not known for being stellar at communication. Of the whole turnkey business model, turnkey providers are typically the worst with the PM side of things. Because honestly, PM stuff is very people and communication-oriented and that's just not what makes a good turnkey company good. Finding killer deals, rehabbing....those are what make turnkeys good.

With that said, a couple things-

- of all the turnkeys I work with, and I work both in Indy and KC, the Indy turnkey folks I know are by far the best of all the companies for communication. Doesn't mean they will be flawless, but they are significantly better than other companies I work with.

- you absolutely in no way have to use the PM that comes with a turnkey property. Once you buy the property, you can use whoever you want. So I recommend interviewing a couple-few PM companies, in addition to the one that comes with the property. Go with who you like best. In a lot of cases, turnkeys come with some guarantees (rent or scope of work) that are only good if you are using their PM. In those cases, use their PM for the length of time that the guarantee is good for and then peace out if you don't like them. To cover yourself further during that time, you can get eviction insurance so any defaults or evictions or whatever are covered. If steady income is coming in, it takes the immediate pressure of an annoying PM off your hands.

- I actually like KC better over Indy, but KC is a lot lower on inventory right now and Indy has been extremely consistent for quality.

I wrote an article on here about PM communication things, but can't think of which one it is to put the link on here. Helpful, I know :)

See this reply in the discussion

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Brett Snodgrass
Investor · Indianapolis, IN · Member since 2014 · 2k+ posts · 601 votes
9y
Hi @James You ,
I'm a wholesaler but Indy has provided my company a lot of deals over the past 10 years. Great people here too.
0 Reply
Michelle T.
Indianapolis, IN · Member since 2014 · 205 posts · 74 votes
9y
At the rate we are going here in Indy it will be summer by March!
The INREIA meetup with be March 14th if you are here then. http://myinreia.com/
They are always good to go to.
CIREIA's main meeting will be March 9th https://www.cireia.org/
Have a great trip and maybe we'll see you around!
0 Reply
James You
OP
Real Estate Agent · Los Angeles, CA · Member since 2017 · 125 posts · 37 votes
9y
@Brett Snodgrass @Michelle T. Thank you for sharing the information. Where would be areas you would suggest taking a look at? I'll be looking at SFRs around 70~100k. I'll be there on March 23~24th by the way.
0 Reply
Ali Boone
Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
9y
Well, a word of caution, turnkey PMs are not known for being stellar at communication. Of the whole turnkey business model, turnkey providers are typically the worst with the PM side of things. Because honestly, PM stuff is very people and communication-oriented and that's just not what makes a good turnkey company good. Finding killer deals, rehabbing....those are what make turnkeys good.
With that said, a couple things-
- of all the turnkeys I work with, and I work both in Indy and KC, the Indy turnkey folks I know are by far the best of all the companies for communication. Doesn't mean they will be flawless, but they are significantly better than other companies I work with.
- you absolutely in no way have to use the PM that comes with a turnkey property. Once you buy the property, you can use whoever you want. So I recommend interviewing a couple-few PM companies, in addition to the one that comes with the property. Go with who you like best. In a lot of cases, turnkeys come with some guarantees (rent or scope of work) that are only good if you are using their PM. In those cases, use their PM for the length of time that the guarantee is good for and then peace out if you don't like them. To cover yourself further during that time, you can get eviction insurance so any defaults or evictions or whatever are covered. If steady income is coming in, it takes the immediate pressure of an annoying PM off your hands.
- I actually like KC better over Indy, but KC is a lot lower on inventory right now and Indy has been extremely consistent for quality.
I wrote an article on here about PM communication things, but can't think of which one it is to put the link on here. Helpful, I know :)
3 Reply
Jason Hawk
Real Estate Services · Olathe, KS · Member since 2015 · 329 posts · 57 votes
9y
Hi Kee You - welcome to BP. Kansas City is a great market with an amazing ROI. Feel free to connect.
0 Reply
Dan Krupa
Real Estate Broker · Phoenix, AZ · Member since 2013 · 749 posts · 399 votes
9y
@Ali Boone awesome summarization of what is happening here in the KC market and what I see from some of the TKs. I wish everyone inquiring about TKs would follow you.
0 Reply
Dan Krupa
Real Estate Broker · Phoenix, AZ · Member since 2013 · 749 posts · 399 votes
9y
@James You , I can't tell you about TKs in KC. I don't do that. I honestly don't even work with other investors. What I can tell you is to look at the macro elements of KC vs. Indy. This city is growing and is growing stupid fast. With a huge influx of jobs and infrastructure. Follow the jobs my friend, follow the jobs.
0 Reply
Todd Douglas
Realtor · Detroit, MI · Member since 2017 · 184 posts · 33 votes
9y
@James You Hello, I have a few investors interested in those two markets lately(MO, IN) they seem to be flourishing in all aspects including PN, NPN, and SFR. Lets chat.
0 Reply
James You
OP
Real Estate Agent · Los Angeles, CA · Member since 2017 · 125 posts · 37 votes
9y
Originally posted by @Ali Boone:

Well, a word of caution, turnkey PMs are not known for being stellar at communication. Of the whole turnkey business model, turnkey providers are typically the worst with the PM side of things. Because honestly, PM stuff is very people and communication-oriented and that's just not what makes a good turnkey company good. Finding killer deals, rehabbing....those are what make turnkeys good.
With that said, a couple things-
- of all the turnkeys I work with, and I work both in Indy and KC, the Indy turnkey folks I know are by far the best of all the companies for communication. Doesn't mean they will be flawless, but they are significantly better than other companies I work with.
- you absolutely in no way have to use the PM that comes with a turnkey property. Once you buy the property, you can use whoever you want. So I recommend interviewing a couple-few PM companies, in addition to the one that comes with the property. Go with who you like best. In a lot of cases, turnkeys come with some guarantees (rent or scope of work) that are only good if you are using their PM. In those cases, use their PM for the length of time that the guarantee is good for and then peace out if you don't like them. To cover yourself further during that time, you can get eviction insurance so any defaults or evictions or whatever are covered. If steady income is coming in, it takes the immediate pressure of an annoying PM off your hands.
- I actually like KC better over Indy, but KC is a lot lower on inventory right now and Indy has been extremely consistent for quality.
I wrote an article on here about PM communication things, but can't think of which one it is to put the link on here. Helpful, I know :)
Thanks Ali. I think I've already read your blog about PM. Great article, really enjoyed it. Thank you for sharing your thoughts!! PM, PM, PM will be very crucial for me
0 Reply
James You
OP
Real Estate Agent · Los Angeles, CA · Member since 2017 · 125 posts · 37 votes
9y
Originally posted by @Todd Douglas:

@James You Hello, I have a few investors interested in those two markets lately(MO, IN) they seem to be flourishing in all aspects including PN, NPN, and SFR. Lets chat.
Send me a message. We can chat!
0 Reply
James You
OP
Real Estate Agent · Los Angeles, CA · Member since 2017 · 125 posts · 37 votes
9y
Originally posted by @Dan Krupa:

@James You , I can't tell you about TKs in KC. I don't do that. I honestly don't even work with other investors. What I can tell you is to look at the macro elements of KC vs. Indy. This city is growing and is growing stupid fast. With a huge influx of jobs and infrastructure. Follow the jobs my friend, follow the jobs.
That's what I hear about KC. Just a bit skeptical of the TK providers out there
1 Reply
Michelle T.
Indianapolis, IN · Member since 2014 · 205 posts · 74 votes
9y
Originally posted by @James You:

@Brett Snodgrass @Michelle T. Thank you for sharing the information. Where would be areas you would suggest taking a look at? I'll be looking at SFRs around 70~100k. I'll be there on March 23~24th by the way.
PM'd you.
0 Reply
Tom Ott
Equity Raiser and Turnkey Provider · Cleveland, OH · Member since 2016 · 4k+ posts · 1k+ votes
9y
Originally posted by @James You:

Originally posted by @Dan Krupa:
@James You , I can't tell you about TKs in KC. I don't do that. I honestly don't even work with other investors. What I can tell you is to look at the macro elements of KC vs. Indy. This city is growing and is growing stupid fast. With a huge influx of jobs and infrastructure. Follow the jobs my friend, follow the jobs.
That's what I hear about KC. Just a bit skeptical of the TK providers out there
Just make sure it is a company with PM experience. Sometimes these providers do not delivery as promised. Also, I hear a lot about these markets. Is it possible they are getting too saturated?
0 Reply
Gerard J.
Senior Network Engineer · Castle Rock, CO · Member since 2018 · 53 posts · 30 votes
8y
Just Followed this thread as I have Indianapolis and Kansas City in my target list. I'm still in the fact-finding and education stage and interested in following how everything about these markets evolve.
I've also read @Ali Boone's articles and nice to see her contribution to this thread as I'm a follower of her strategies.
0 Reply
Matt K.
Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes
8y
I have a feeling the KC market is going to be on fire soon when the weather gets better. Even the short time I've been there (~3 yrs) it's gotten harder and harder. Deals still exist but competition makes thing interesting...
0 Reply
Mike D'ArrigoPro Member
Turn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
8y
Originally posted by @Matt K.:

I have a feeling the KC market is going to be on fire soon when the weather gets better. Even the short time I've been there (~3 yrs) it's gotten harder and harder. Deals still exist but competition makes thing interesting...
Matt, it already is on fire! We're in both the Indianapolis market and Kansas City. 3 years ago, our business was 70% Indy 30% KC. Now it's 50/50. Both are excellent markets.
0 Reply
Matt K.
Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes
8y
Originally posted by @Mike D'Arrigo:

Originally posted by @Matt K.:
I have a feeling the KC market is going to be on fire soon when the weather gets better. Even the short time I've been there (~3 yrs) it's gotten harder and harder. Deals still exist but competition makes thing interesting...
Matt, it already is on fire! We're in both the Indianapolis market and Kansas City. 3 years ago, our business was 70% Indy 30% KC. Now it's 50/50. Both are excellent markets.
I guess I should say even more on fire lol? I got outbid (and I'm assuming by a lot seeing as I was putting down a good amount, all over list) on like 3-4 SFH.... and this was over the holidays when it's usually slow and the weather was terrible. Even the place I got took a bit of luck and still went over list, which is crazy. Been watching these duplexs go under contract week on market, makes me feel like bay area (sans the price haha). Curious to see what happens once the weather gets warm, but even more so more towards the summer before the school year starts. Hopefully all this means my rental in 64114 should go fast come April haha.

These all went contingent/pending fast, will be curious what they end up at
https://www.redfin.com/MO/Blue-Springs/3812-SW-8th... (tri)
https://www.redfin.com/MO/Kansas-City/432-E-63rd-T...
https://www.redfin.com/KS/Olathe/1428-E-Sheridan-S...
https://www.redfin.com/KS/Mission/7215-W-56th-Ter-66202/home/83319520
0 Reply
Mike D'ArrigoPro Member
Turn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
8y
@Matt K. Multi families are insane. We sold a turn key duplex literally within 15 minutes of putting it out. They get snatched up fast.
0 Reply
Alex Corral
Denver, CO · Member since 2017 · 142 posts · 104 votes
8y
Matt K. The cash flow doesn't look great on those compared to other States. Counting on a little cash flow & a lot of appreciation?
0 Reply
Matt K.
Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes
8y
Originally posted by @Alex Corral:

Matt K. The cash flow doesn't look great on those compared to other States. Counting on a little cash flow & a lot of appreciation?
None are mine, but if you look at
https://www.redfin.com/MO/Kansas-City/432-E-63rd-T...
looks like market rents are about 900 side
Look up on hotpads
626 E 63rd Terrace
Kansas City, MO 64110

In general though that areas got some expensive homes and is gentrifying some around it, I'm not sure I'd bank on appreciation like that, but it'd work well if you were to house hack it.
0 Reply
Alex Corral
Denver, CO · Member since 2017 · 142 posts · 104 votes
8y
Matt K. Yeah, I hear you. I mean $1800 gross on a $230k property is not even 1%. I like KC. Have been looking there, but I can't find deals I like. I'm working on 2 duplexes in Indy now. $1200 gross per duplex, with a cost of $71k per duplex. Almost 1.7%.
0 Reply
Matt K.
Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes
8y
Originally posted by @Alex Corral:

Matt K. Yeah, I hear you. I mean $1800 gross on a $230k property is not even 1%.
I like KC. Have been looking there, but I can't find deals I like. I'm working on 2 duplexes in Indy now. $1200 gross per duplex, with a cost of $71k per duplex. Almost 1.7%.
That duplex, it's around houses that are significantly more. Go little farther out the houses are the same price, but they are just a house. If you were local and got that duplex and could get 900 mo for the other side, it'd probably a good chunk of your housing costs.

2% is nice, but yea it's getting really tough if not impossible to hit that in KC (even more so outside of rougher areas). I just got a duplex in the suburbs and it's just tad under 1% but there's some value add and or chance to raise the rents.
1 Reply
Sandeep Yarlagadda
Tucson, AZ · Member since 2018 · 5 posts · 5 votes
8y
I am new to bigger pockets. I am also looking to invest with TK companies. Do you have any recommendations in KC or Indy markets?
0 Reply
Mike D'ArrigoPro Member
Turn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
8y
@Alex Corral I'd be real careful with MF in Indianapolis. Most are in the old, rough areas which don't perform well. We've only a couple of MF in Indy in the last 5 years for a reason. Indy is a much better SFH market. I'd be happy to take a look at the one you're talking about if you want to give me the address,
1 Reply
Alex Corral
Denver, CO · Member since 2017 · 142 posts · 104 votes
8y
Mike D'Arrigo thanks! I'd love to chat with you and get your take. I've been studying Indy for a few months now, and I'd greatly appreciate your expertise on the area. I'll send you a PM.
0 Reply

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