Investing in Indianapolis

10 Replies

Hi everyone my name is Ben and Ive been trying to find a good market for buy and hold rentals (single family homes). A lot of research has led me to areas in and around Indianapolis. Are there any investors in that area that could share some tips or maybe know a great investor friendly agent that works in the city?

Hi @Ben Fonohema ! I currently invest out of state in Indianapolis and have been for over 3 years without any plans of stopping. In that time, I have worked with a number of turnkey providers and property managers. I haven't needed an agent because I conduct my own due diligence when making my purchases. It's not difficult being OOS, but it does take a level of trust. I'd be happy to connect with you if you'd like to chat!

@Ben Fonohema I'm an investor and business developer for a property management company and work with a lot of OOS investors who have holdings in the Indianapolis Metro market. It's a good market, but you have to weed through the hype. Building a good team and learning to do your due diligence and properly evaluate deals is going to be the most important steps. I also recommend coming out and visiting the city at some point. There can be a discrepancy between the way the city is marketed and the actual reality of the city and I think it's important to see first hand. There are too many people marketing "up and coming" areas that are generally pretty risky for OOS investors if they don't have an adequate team and resources. I usually recommend starting with more of the straightforward stuff first and you can expand as you are more comfortable with your team and have more experience. The marketers who are supplying inventory tend to make things sound easier than they actually are and things can get rapidly frustrating for new investors.

@Ben Fonohema I agree with @Ross Denman . Indianapolis is a good market when you know the areas and neighborhoods. There's a lot to sift through. As a new OOS investor, I strongly recommend sticking to the proven areas and better class neighborhoods. We stick with neighborhoods that command rents of at least $750/mth for a 3Br.

@Ben Fonohema The "right" area will have to do with your personal goals. Are you looking for appreciation? Added value? B class/C class? Or highest return on your investment? Start narrowing down what you're looking for and you'll be in a really good position to connect with the right people in Indy. 

Originally posted by @Ben Fonohema :

@Ross Denman thank you for your advice. Your right, there is a lot of hype lol. What good areas do you work in that have solid rents you would recommend?

 As @Mike D'Arrigo mentioned above, I hesitate with SFR's that can't demand at least $750/mo in rent. I find the safest place to be is above $850 or $900/mo. If you're rents are lower than that, you are probably subjecting yourself to a lower demographic of the tenant pool. Local investors can do it and it may be great for section 8 or other strategies, but for bread and butter rentals, I find the sweet spot to be $900-$1,200/mo. The lower end of the spectrum you go, the more time intensive it becomes. Drama, late rents, damages, excessive maintenance, evictions, etc. Even a good property manager can't babysit a property/tenant on a daily or weekly basis.