Examples/Advice for LTR in Indy? Comments on my buy box?

Question

I'm hoping to purchase my first LTR in the Indy area in the next 1-3 months but I've been struggling to pinpoint my exact buy box. I was hoping someone on here could help answer some questions and provide some examples for deals that they have done recently?

My current buy-box: $140K-$180K | 3/4 bd | $1500+/mo rent |C-B class (46203,46229,46226) | Minor renovations ideally

15% down conventional financing (just got pre-approved @7.5% but shopping around)

Since this will be my first deal, I'm focused on getting some experience and don't mind a break even or even slightly cash flow negative deal.

- Would anyone mind sharing the details of a deal they did in the Indy area recently? - Is anyone finding success with turnkey rentals or do I need to switch my strategy?

- What are you guys using for your operating expense assumptions?- How much should I project for setup costs/initial repairs? I plan to use a PM since I'm OOS.

- Any other advice for me or questions that I should be asking?

I feel I'm been struggling to make this feel "real", so any recent examples would definitely help calm the nerves! I'm also visiting the area in a month so any local recommendations are welcome! Thank you!

Orr Kichin · Answer

Hey Nick,

i have 7 properties in Indy and I manage them myself. If you want PM me, and I'll answer all these questions you had, but I did want to tell you, that it's not a good idea to have a mentality of "I'm ok with breaking even or a bit if negative cash flow". Anyway you'll have less cash flow than what your Excel shows you. It's just the situation with houses in Indy, especially turnkey (you don't know how good the rehab was done, and what kind of tenant will you have). So if you aim for even less, you'll end up much much lower.

second, consider self management. I didn't do it for years, and when I finally did, it wasn't all that scary and that much work after all. Though there is work. PMs are taking a big chunk out of your income, also in repairs, not only fees.

Good luck!

Orr

Drew Sygit · Answer

Anyone you do business with - put them through a wringer to prove to you what they advise!

Otherwise, you'll get taken advantage of:(

We see this all the time in our Metro Detroit market.

Owners come to us with a property they already bought and we ask why'd they buy it when there were so many better properties on the market?

The agents, contractors and PMCs will take the time to educate you if you politely ask the right ones.

Nick Thanaet · Answer

I appreciate the response! The market does seem very difficult right now, and it's a bit discouraging when I'm analyzing potential deals. I'm being conservative with my assumptions to account for all the unknowns, but I'm also worried I'm overanalyzing each deal and won't be able to find anything cash-flowing. Do you have any insight as to the best ways to approach an out of state market, especially with limited capital? Am I wasting time by searching for a turnkey deal, or should I focus my efforts on more of a value add project?

Nicholas L. · Answer

@Nick Thanaet

hello.  I don't know the IN market specifically, but I always get concerned when new investors plan to buy something significantly under the median price in a market, from thousands of miles away.  you're nearly guaranteeing that you're going to put yourself in a more challenging area and have a rougher time.

it's great that you're going to go there in person.  the best possible thing you can do is to try to meet folks in person and build a team.

the market is very challenging right now, and anyone who tells you otherwise is selling something.  i'd encourage you to be patient and skeptical and not buy something just to buy.

i hope this helps and I am happy to answer any other questions you have. i am on BP to help new investors not lose money, not to tell them to "go for it."

Gloria N Gear · Answer

Hi Nick - welcome to Indy.  I have been working with OOS investors for nine years now and have properties myself.

(Shoutout to Jason and Orr -- very sound advice from both -- I owe you both a phone call, we haven't talked in a while).

YES, your strategy is very possible in Indianapolis.  Like the others have already said, Indy is very street by street and you can't just do a blanket zipcode.  I am personally hitting those numbers on the west side of Indianapolis in the Wayne township.  There are several good rental areas closer to the highway 465 circle -- properties are built in the 1960s-1980s and easiser rehabs.

Financing -- I just had an investor bring me a pre-approval for a DSCR loan at 7% - so yes, keep shopping.

My team will do all the boots on the ground for you, but also will help to connect you with property managers, inspectors, contractors, etc., so that you have multiple eyes on a property to make sure that it is a good deal.

Happy to have a conversation with you and discuss some of your other questions in detail.  I will be completely open with my numbers and what has worked or not worked for me personally as well.

FYI -- great questions -- you are definitely asking the right things and headed in the right direction.

Nick Thanaet · Answer

Hi Orr! Thank you for replying! I just shot you a PM and would love to dive deeper on this!

Jason Malabute · Answer

When I first started my real estate journey back in 2017, my first market was actually Indianapolis. I’d strongly recommend visiting the market in person before buying anything and focusing early on building the right local team.

To your questions:

• Yes, I can share generally that I’ve done multiple BRRRs in Indy. Some were profitable and some just broke even. That’s normal early on. The key is working with a trustworthy real estate agent while still remembering that their ultimate goal is to make a sale, so you need your own filters and discipline.
• Having true boots-on-the-ground is critical in Indianapolis. It’s very street-by-street. One block can be solid and the next can be very rough, even within an “okay” zip code.
• For operating expense assumptions, I’d talk directly with a local property manager. They’ll give you the most realistic numbers for that submarket.
• Setup costs and initial repairs really depend on the property and how much deferred maintenance there is. I’d also recommend planning for at least six months of reserves, especially since this is your first deal and you’re out of state.

General advice: talk to locals, and also talk to a CPA who specializes in real estate. They don’t need to be local, but they should understand real estate investing and Indiana rules. With the right planning, there can be ways to maximize tax advantages beyond the basic “passive losses only offset passive income” framework, depending on your situation and qualifications.

Hope that helps—Indy can be a great learning market if you approach it carefully.

Nick Thanaet · Answer

Hi Jason! Thanks for replying.

Should I be waiting to connect with a PM until I have a few deals that I'm ready to make an offer on or start finding one now? Also, how does it typically work when running a deal by an agent, PM, lender, etc. - I'm assuming I should only be having them double check a deal that I'm already confident in?

One of my concerns is having enough capital for all the unexpected costs. Even with conservative assumptions, I feel like everything still costs more than I anticipated. Although I'm aware how difficult BRRR can be, would that be a better route to take to utilize more leverage?

Thank you for you help again!

Examples/Advice for LTR in Indy? Comments on my buy box?

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