Buffalo, NY · Member since 2014 · 371 posts · 146 votes
12y
The numbers look good to me. As you said, inspection will be key to make sure there is not a major issue. If you are bold, you can ask the tenants during the walk through if there "is anything they would change" about the house. Be friendly, and they will give you an honest answer. They are usually willing to tell you the truth because they want the "issues" fixed if there are any.
Rental Property Investor · Fayetteville, NC · Member since 2014 · 884 posts · 670 votes
12y
@Petru Popovici - on the surface it looks to have very good cash flow. I would want to know why it is being sold at such a low price, especially if improvements were made recently. Are you sure that there isn’t deferred maintenance that is going to surface? Unexpected roof/HVAC replacement can be expensive. Are the tenants current? Do the sellers have rent rolls for the last two years? Are the units individually metered for utilities?
Investor · Littleton , CO · Member since 2014 · 30 posts · 10 votes
12y
I just started looking at it but will find out more within the next few days.
I know the roof and A/C where done in 2006.
The tenents are current but I will ask him for bankroll to prove that.And as far as them being individually metered i'm not sure but the renters pay there own utlities so I would assume they are. I will ask them that as well. I plan on getting a very extenive inspection and speaking to the property mangement company currently in place, but other then those things anything else I should ask or be aware off?
Investor · Littleton , CO · Member since 2014 · 30 posts · 10 votes
12y
Just spoke to the owner and the reason he is selling is that he has 2 properties and wants to sell them both to purchase a home for his family.
He is going to provide me rent rolls asap
I confirmed that there was a new heater/ac and roof put in in 2006
And yes the propeties are individually metered
Aurora, CO · Member since 2012 · 2k+ posts · 1k+ votes
12y
Looks like it could be good one ! I don't live in Indy, and it doesn't look like you do either, so I would call several property managers and give them the address, ask their opinions about the neighborhood. It's probably fine, but I have read that there are some bad areas there; you don't want to be buying in a warzone and not know it. Probably not an issue, but it might be prudent to get a few opinions.
Buffalo, NY · Member since 2014 · 371 posts · 146 votes
12y
The numbers look good to me. As you said, inspection will be key to make sure there is not a major issue. If you are bold, you can ask the tenants during the walk through if there "is anything they would change" about the house. Be friendly, and they will give you an honest answer. They are usually willing to tell you the truth because they want the "issues" fixed if there are any.
Investor · Littleton , CO · Member since 2014 · 30 posts · 10 votes
12y
That's great advice I was planing on speaking to them. Wanna make nice with them so they want to keep the home looking good.
From what I hear the pwner said that the tenats have been there for years and are great and get along with each other great as well!
I agree with @Aaron Montague but would recommend you connect with some people on BP living in that market to give you some sense of the surrounding neighborhood.
Investor · Littleton , CO · Member since 2014 · 30 posts · 10 votes
12y
For that low huh?
I heard from a few lender that starting Jan the lowest they will really go is about 50k do to regulations..but ill call around
Thank you!
@Petru Popovici just saw this post and I see you live in california I do as well. I want to invest in out state as well is way cheaper than california. If you dont mind me asking how did you find this property. I'm new to this whole thing trying to learn as much as I can. Any info would be helpful. Thanks.
Thanks for asking that Adine... I was sitting here thinking the same thing and you jumped in and asked. Thank You. I'm clearly a newbie but chomping at the bit to get going. :-)
Real Estate Investor · Henderson, NV · Member since 2011 · 87 posts · 22 votes
12y
Petru, having owned duplexes in Indianapolis before my recommendation would be to get a SFR in better areas. My previous experience with Center township properties in the "downtown" has been very challenging. The numbers look good on paper but you will deal with maintenance, higher tenant turnover/vacancy rates, and crime. Whichever way you decide, good luck to you!
Turn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
12y
@Petru Popovici I would advise against a duplex if you're a new investor. The numbers always look good on paper but I can tell you from plenty of experience, they rarely pan out. We offer turn key properties in Indianapolis so I know the market very well. We even offer some duplexes in very selective areas but I always steer first timers away from them. You can expect higher turn overs. The vacancy rate you're using is 8%. I can absolutely guarantee your vacancy rate is going to be more than 8% and could be significantly more than 8%. 8% is a fairly low projection on a SFR in Indianapolis and a duplex will have a higher rate than a SFR. Especially since 1 tenant is on a month to month. They can leave any day. Also, how is water paid by the tenants? It's very rare that a duplex is going to have separately metered water--gas and electric yes, but not water. You need to look in to that. Feel free to give me a call if you want to review the deal. If you want to PM me with the address I'll be happy to tell you what I think of the area.
Thank you everyone for all your feedback I am now officially scared to invest the Indy area lol
Don't be afraid of Indianapolis as a whole, it's good to be leery of some rough areas just like any market.
With those low rents, it sounds like an older [turn of the century] built double in Center Township - which IS a challenge even though it looks great on paper [ask me how I know!].
I'd stick with a modest, post war, built ranch for starters and work from there. These can be picked up for under $55k with fresh rehab and occupied [turnkey] @ $750-$800 per month rent. I know these numbers don't look as sexy but there are "real world". These homes work and are easy to rent and/or sell anytime.
Of course an amazing power team on the ground is very important as well.
Real Estate Attorney, Broker, Investor · Indianapolis, IN · Member since 2013 · 207 posts · 58 votes
12y
Petru,
Indianapolis is a good market to investment in. However, I always suggest to my clients to begin slowly. Single family dwellings are are a good entry point into any market.
If I can be of assistance, please feel free to contact me.
Investor · Indianapolis, IN · Member since 2013 · 647 posts · 196 votes
12y
Do not be scared of Indianapolis. There are great properties and neighborhoods to invest in. Take the time to get to know someone on the ground. I would start by working with one of the guys above. @Shawn Holsapple and @Mike D'Arrigo know the Indianapolis market well.
Yes, be careful of duplexes. People in Indianapolis prefer for the most part SFR and there are a ton of them available here. Indianapolis is different say from Connecticut or Baltimore where it's quite common for people to live in Multi family rentals. People have more options in Indianapolis and will always choose single family over a duplex when given the choice.
Property Manager · Santa Rosa, CA · Member since 2014 · 56 posts · 16 votes
12y
Petru,
I am also from California and recently purchased a SFR in Indianapolis, I have only had it for a few months but if you need any help or advice about the process reach out and I would be more than happy to help.
"Even if the place just got rehabbed a few years ago and the place already has tenants with leases in place?"
3 years is an eternity for a duplex. Tenants can destroy a place in 3 months let alone 3 years and often do with duplexes in Center township. It doesn't matter how nicely rehabbed it is, location is what is most important. A lot of people who know Indianapolis well like @Shawn Holsapple, @Richard F.
and myself are waving warning flags. I hope you'll reach out and get more advice. As Shawn has pointed out, this is most likely an old turn of the century duplex in Center township. If so, my advice it to run not walk from it. You will regret it. That's not to say you can't do well with a duplex but just not in these areas but in general, I don't recommend duplexes for first time investors. What usually happens is they don't come close to delivering the returns they show on paper, have high vacancies and turn over cost and the inexperienced investor then gets disappointed and gives up on real estate investment.
Rehabber · Fishers, IN · Member since 2014 · 17 posts · 1 vote
12y
@Petru Popovici you did a good thing to reach out to this community for advice and have inspired me to do the same when I finally find my first property. I'd recommend setting keyword alerts for 'indy' and 'indianapolis'. What you'll find after looking at posts on here is that it's one of the best, if not the best city for passive income right now.
The concerns that Mike and Shawn are pointing out could apply in any area you buy - watch out for bad areas and try single family homes for your first property. So, don't be afraid of Indy.
You've met a lot of good people to know here locally. Here's another guy: @Steve Lawson that helps a lot of out of state investors get Indy properties.