Indianapolis property comparision -- Good or bad?

4 Replies

Hi guys,

This is my first purchase for a rental property, I am confused between 2 properties one is at Cork Bend Dr which is listed at 125k ,year 2006 which cash flows 11.30% . The other one is North Dequincy @ 85k, year 1957 ,which cash flows 17.35%(which will be completely rehabed). 

The one in Dequincy falls in Washington township.

Which one would be a wise move? Why?

Thanks a lot for all your help. 

Hi Stanley,

I do a lot of business in Indianapolis and know the areas well. In fact, I have an available turn key on Cork Bend. These are two very different areas but I would need to know where on Dequincy the property is. Indy varies neighborhood to neighborhood and block to block so you need to be real careful. In general, Cork Bend is a much nicer neighborhood but that's not to say it's a better investment. It all depends on your investment objective and level of risk tolerance. The big concern I would have about Dequincy is that at $85K you could be way overpaying. Most of Dequincy is a fairly decent C class neighborhood but I don't know of anything worth $85K anywhere on the street. I'd also be skeptical of the ROI figures. At $125K for Cork Bend, there is no way it will have an 11.3% return. Typical rents there are about $1100-$1200. That's going to give you about an 8% ROI and there's nothing that is going to give you 17.35% return. These numbers are way off. Feel free to give me a call and I can share my thoughts in more detail. In general, I think you need to get more educated on the areas and the returns before you make a decision.

@Stanley H.

Just to clarify my last post, if the property on Dequincy is in the 2 block area between 40th and 42nd, it would probably support an $85K price, but not anywhere else. If you want to send me the address on both of the properties I'll be happy to take a look at them and give you my opinion.

Sure tried calling you, but didn't get through.

I'd agree with @Mike D'Arrigo those prices seem near or at retail and probably won't cash flow very well.

Do you already have a PM & team on the ground?

If not, I would strongly suggest talking to a few property managers and get their input since they are the ones that will be managing the day to day for each.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here