I'm from the Bay Area and planning to venture in the Midwest with a partner and started looking at MFH close to downtown Indy. I'm focusing on cash flow, and found a good realtor to help me find cash flowing properties, I'm not rushing but gave myself until end of year to close on a property. I'm targeting properties under $150K, COC 15% (yes I'm shooting for the stars, I'm a patient man with big goals and ambition). I'm analyzing using the bigger pocket rental calculator and analyzed around 10 homes already in the last 2 weeks, found a few possibilities and my realtor serves as my boots on the ground to scout the property. I'm also starting my pre approval process, there will be two borrowers my partner and I, both have solid W2.
Our goal is to build a strong portfolio in the next 2 years of small MFH in Indy to ultimately replace our W2 and have more options, I don't see myself quitting a full time job but it's the sense of freedom and having the opportunity to spend time with family and love ones as I will be a married man in a few months :) I also listen to BP webinars religiously, and connect to fellow investors. My focus again is cash flow and appreciation so I'm focusing on properties in relatively good neighborhood.
My question to the more seasoned BP OOS investors, if you can or desire to rebuild your empire, will you invest in Indy, if so where? What will be your niche market SFR or MFH? What's the biggest lesson learned you have in investing? Advice to newbies starting out to be successful?
Thanks in advance for your input, very much appreciate it. I promise to pay this forward.
I've invested in turn-key SFRs in Indy. The positive for SFRs is that they tend to be boring. Low turn-over, residents bring their own appliances so you're not buying/maintaining them, and people tend to take care of their homes as if they were their own. I've been interested in MFRs there, especially one that I could add value to, specifically in the Rocky Ripple/Broad Ripple areas (though I can't say I've spent a huge amount of time in Indy, so other areas may be better). If you find a good investor agent, please share with me.
@Leslie Bandy , great meeting you and thanks for providing your input for SFR. How was your experience so far for turn-key, how is the COC? My partner and I are still in the early stage of scouting the Indy areas close to downtown for small MFH and found a few promising houses but nothing set in stone. I have a realtor that's serving as our boots in the ground in the 46225 area, I will let you know about the experience and will keep you looped in.
I live in Southern California and invest in Indianapolis. Like you a year ago I decided I wanted to start, 6 months later I purchased my first duplex, and now I have a couple of leads and am looking to take down my second. I will not be leaving my job, but just want something secure to invest in my current 401k is a total scam.
Like Leslie said buy and hold is very slow and boring - but that is exactly what I was looking for. Duplexes are harder to find most are converted SFRs which are problematic. I like the cashflow of duplexes, but due to appreciation and downpayment I will probably be going with SFRs for the next few - I can finance those at 20% down but duplexes would be 25% meaning more cash up front.
Best of luck, let us know how it works out.
It sounds like you have your criteria outlined and your goals are realistic. I'm sure you will do well if you stick to your plan. My advice would be to make sure you find a good property manager that you trust.
Apologies for the delay in getting back to you! So far, my experience has been really good. My initial investment was about $22K and my cash flow is $378/month (down from $406 for the first 2 years because of a property tax increase), but COC is still a healthy 20.6%. I did have a double whammy of setbacks this year. The tenant was late paying rent and my prop mgt co. immediately filed an eviction notice, so there were some fees there. The tenant did catch up with rent and stayed. The furnace also went out which cost about $3K, so this year will be nearly a wash for cash flow though the tax deductions still help. I'm hoping to add more properties to my portfolio in 2018 so, all in all, I'm still very happy with making money this way.
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