Investing In Indianapolis

15 Replies

Hey guys, 

My name is Brandon and this is my first post (even though I have been on BP for awhile). I'm an investor from Utah, looking to branch out into other markets and currently have interest in the Indianapolis market. So much so, that I am heading out there this weekend to get a "boots on the ground" look. Interested in mainly buy and hold

In leading up to the trip, I have been reaching out to some of you and also doing my research on what areas to avoid and which ones are coming up. Responses have been mixed, and it sounds like a few blocks can make all the difference in the world.

My question is- does anyone have any advice for staying out of unfavorable areas? I'm seeing properties being wholesaled for 20-30k (all require work), so I am guessing those aren't in the best areas? I had someone mention that the areas with rents under $700 might be good to avoid.

Areas I have seen properties in are: Anderson, Lawrence, Warren Park, Shelton Heights, Noblesville, Whiteland and Mapleton Fall Creek.

Any help is GREATLY appreciated.

I have a duplex property for sale that is fully rented in Elwood Indiana. If it's something you're interested and we can discuss. Otherwise I'd be happy to help you out with some advice in the Indianapolis area.

Thanks Zach

What type of property are you looking for Brandon? I have 7 turnkey rentals in Indy in working class neighborhoods that over the past four years have been purchased complete, with tenant for $48k - $68k. average rents are $500 - $750

I'll also be in Indy this coming weekend to help a fellow BP forum member who is looking at the same TK company I use. Let me know if I can be of any help...

Regards

Hank

@Brandon Bishop I would agree with the avoid the under $700 rents.   In fact, I would raise it to under $800 or $850.  As an out of state investor the cheaper properties are going to be more headaches than you can imagine.  The exception to that is if you have an on the ground partner who is actually co-invested with you for aligned interests and can handle these investments.  I have made a number of such investments with a CF, and have written about it in my BP blog series:

Have I Found the Holy Grail of Passive Real Estate Investing?

Hi Brandon,

I'm from Utah too. I've purchased 3 properties in Indy so far this year. I actually lived out there for a year and got to know it really well. If you'd like to chat sometime just let me know. I may be able to help.

Steve

@Hank Keller I am looking for SFR homes or duplexes. Would prefer distressed properties that I can turn into rentals (like to keep the 20% equity after repairs for refi).

@Larry Fried Thanks for the advice. For now I will be hiring a property manager and managing remotely.

@Steve Olson I would love to chat with you over some of these deals. I am also looking locally, as well as other markets. I sent you a colleague request. 

We operate a very successful Turnkey operation here.  Things in Indy can vary street by street.  I'd be happy to chat with you about it.  PM me for more details...maybe we can meet up when you're here.

@Brandon Bishop I think that setting a minimum rental price is a good way to pre-screen the market. The median rental in Indianapolis is now around $900/mo. This varies a lot by neighborhood, size of home, number of rooms, amenities, etc. Our PM company average rental is just under $1,000/mo across the board, but we manage units from $450/mo-$2,950/mo. If you are in center township (downtown area) I don't prefer family homes. The IPS school system is the worst in the state, although there are some nice magnet/charter schools popping up. I try to stay away from lower income areas in center township that attract families, so I usually recommend smaller 3 bedrooms or 2 bedroom bungalows with nicer amenities. This attracts young professionals who will pay more for the home. Young professionals have their own issues though. I do not like the 5 bedroom 3,500 sq ft rental homes downtown that rent for $1,800/mo+ as they tend to be several roommates. Roommates have their own issues and you certainly don't want your home ending up being a "frat" house with a bunch of 22 year olds with too much disposable income.

My preference in the city areas are 2 bedrooms that rent for $700/mo+. 

In the township areas, I prefer 3 bedrooms, 1.5 bathrooms+, 1,000+ sq ft that rent for $800/mo+. Remember, bathroom space is what families outgrow first... especially when raising children.

Other tools that I use are the enforcement and permit history for marion county (https://permitsandcases.indy.gov/CitizenAccess/). You can get some history on the home itself, but I also like to put in a range of about .5 blocks either way to see if there are problematic homes in the area. If all of the homes in the area are getting warnings about high weeds/grass or illegal dumping.... you may be surrounded by vacant homes or poorly managed/tenanted rentals.

Check Trulia's Crime map. (https://www.trulia.com/real_estate/Indianapolis-Indiana/crime/) If there is high crime in the area, it's going to be less desirable.

I usually prefer retail sales activity. You should be able to confer with a PM or Realtor to research whether or not there are home sales and if they are distressed homes or retail sales. Retail sales shows demand which forces appreciation, creates desirability in the neighborhoods, and provides better exit strategies if necessary.

Build a network of local investors and real estate professionals who can offer their expertise. Things are always changing in every market. There are places in the city that were very undesirable 2 years ago that are up-and-coming or hot right now. I remember when everybody was wanting to get in to Fountain Square (SE of downtown) and many real estate professionals didn't know why. No it's difficult to even find deals in FS at a decent prices and home sales are down right silly sometimes.

Watch the activity by the city, investors, job markets, etc. Right now, I am keeping my eyes on Mapleton/Fall Creek area (not Brightwood/Martindale/Fairgrounds/46218 area, this is just east of Mapleton Fall Creek and not as desirable) and Christian Park area. Mapleton/Fall Creek is close to Ivy Tech and about halfway between Downtown and Broad Ripple. Also, the city just went in and repaved many of the roads and refurbed the sidewalks on several streets in the Christian Park area. This location is about halfway between Fountain Square and Irvington which are two hot spots.  Garfield Park and Beech Grove may be coming along too. Brookside Park is probably next to come along as well.

The gentrification is a fun thing to follow and in time, most things will eventually change everywhere... I just don't want to be the first person to stand alone on the island waiting for it to happen.

@Brandon Bishop good luck on your visit.  It is money well spent.  I did the same back in June, and now I can actually visualize what each neighborhood looks like when I see a property come up.  I would say to absorb as much as you can, and not focus on finding a deal.  See as much as you can - take photos and notes - and most importantly meet with the local brain trust. There are a lot of good people in Indy.  Trust your gut on who and whom you can't trust.  Personally, I need to reconnect with many of the fine folks I met, while out there.  Finally, be patient, and things will start to take shape. I know I really wanted to start accumulating those "doors," but I was finding the numbers weren't making sense.  Slowly but surely though, things start to reveal.  Hopefully, you are staying near downtown.  It is a nice, walkable city.  I look forward to my next visit.  PM me if you have any questions.

Brandon,

The neighborhoods seeing solid growth and rent increase in the central areas of Indianapolis I have found focus on the east side near Irvington and Little Flower. Although these are family friendly areas, the prices are increasing as the inventory continues to decrease.

Depending on your strategy, I would recommend focusing on townships and school districts around Indianapolis. Areas such as Lawrence, Pike, and Warren all offer solid schools where you can appeal not only to individuals, couples, and roommates, but also to families of all sizes.

Hope this helps and let me know if you need any further assistance.

@Brandon Bishop I have had some success buying and selling all around Indianapolis and own quite a few houses that may be exactly what you are looking for.  "Distressed properties that you can turn into rentals."  If you want to talk further, feel free to PM me and hopefully we can work out a time to talk.  Good luck and God Bless!

@Hank Keller , I'm also a future Indy investor and would love to see some numbers from actual rentals. I've gotten a lot of numbers from turnkey providers and flippers that just look too good to be true, would love to reality check them with folks on the ground. Maybe I'm just used to too many west coast rentals.

@Larry Fried , loved the blog posts and reports you are diligently making. Let's connect, would love to chat with you on your experience with that company.

@Steve Olson , would love to chat if you have the chance.

@Jeff Schechter , we'll be meeting in Indy when I get there in a month for sure.

@Ross Denman , loved your post. Looks like you really know your stuff in and around Indy. Would love to connect while I'm over there.