West Lafayette Indiana Investing

12 Replies

I went to school at Purdue (West layafette) and now live out of state.  

I'm looking to buy some homes in West lafayette, Lafayette Indiana.

Any cash flow investors out there that can lend an ear.

Prices look awfully cheap from the state I'm in now :)

thanks

Brian

One thing to be aware of is that "West Lafayette" can mean a few different things that can impact costs and rents. Just about everything with a 47906 area code can be called West Lafayette but only a subset of those houses are actually in the town of West Lafayette. To make things even more complicated, only a portion of the houses in the town West Lafayette are in West Lafayette school district.

Also, expect property taxes to double if you are converting an owner occupied to a rental.

@Monique Burns wrong Lafayette. This post is for Indiana.

I own a duplex in the 47909 zip code and am an owner occupant. Recently received my real estate license and will be ramping up a property management company. Please let me know if there is any way I can help you find, analysis, and/or manage properties.

Aaron Van Curen, Real Estate Agent in Indiana (#RB18000238)

What about downtown Layafette Indiana?  Lots of homes < $90k.  Reasonable?

Brian

Looking at a few of the sub-90k properties that are currently rented in the older Lafayette areas, the returns don't look all that appealing for a C-class neighborhood. 

For example:

509 S 20th St / 80,000 list / 900 a month
1618 Grove St / 69,000 list / 750 a month

What would be a good return in Lafayette area?  You mentioned the returns are not there.  What do you view as a good return?

Thanks!

Originally posted by @Brian Lynch :

Looking at a few of the sub-90k properties that are currently rented in the older Lafayette areas, the returns don't look all that appealing for a C-class neighborhood. 

For example:

509 S 20th St / 80,000 list / 900 a month
1618 Grove St / 69,000 list / 750 a month

Just sent you a ? On what would be a good return? 

With a patience, a bit of searching, and budget of ~$140k you can get a 1% property in the West Lafayette school district outside of the areas typically rented by undergrads.  1% on a better neighborhood in south Lafayette would also be good too. My preference would be either of those over a slightly higher ~1.1% return on a Columbian Park property. Scaling the WLSC / South Lafayette rates to Columbian Park, I would be looking for at least 1.5%.

Originally posted by @Brian Lynch :

With a patience, a bit of searching, and budget of ~$140k you can get a 1% property in the West Lafayette school district outside of the areas typically rented by undergrads.  1% on a better neighborhood in south Lafayette would also be good too. My preference would be either of those over a slightly higher ~1.1% return on a Columbian Park property. Scaling the WLSC / South Lafayette rates to Columbian Park, I would be looking for at least 1.5%.

Great points Brian.  One last ? As I ramp up in real estate....... what is so magical on the 1% number you keep quoting.  I realize it’s the monthly rent over purchase price ....... but why is 1% so important?  

Thanks

Brian 

Originally posted by @Brian Massey :
Originally posted by @Brian Lynch:

With a patience, a bit of searching, and budget of ~$140k you can get a 1% property in the West Lafayette school district outside of the areas typically rented by undergrads.  1% on a better neighborhood in south Lafayette would also be good too. My preference would be either of those over a slightly higher ~1.1% return on a Columbian Park property. Scaling the WLSC / South Lafayette rates to Columbian Park, I would be looking for at least 1.5%.

Great points Brian.  One last ? As I ramp up in real estate....... what is so magical on the 1% number you keep quoting.  I realize it’s the monthly rent over purchase price ....... but why is 1% so important?  

Thanks

Brian

It is only as important as you want it to  be. It is a metric of judging a good deal at a quick glance. Similar to 8 to 10% cap rates, and a few others equations. Nothing about it is a perfect way to evaluate a good deal from a bad deal. Many factors play a part in this, maintenane fees, property management fees, vacancy rates, debt servicing along with a few others. I recently bought a class C property north end of Lafayette for $40k and am getting $700 per month rent. Sounds great but it's Class C so probably high vacancy and maintenance. So time will tell on it. Long story short only you can judge what is a good investment and use of your money. If your making money for little to no time invested and not much out of pocket it sounds good to me. I don't like the idea of buying $140k+ with a mortgage just so I am in  a Class B+ area. I know a few very successful people in B- to C+ areas. I also know a few in B+ to A- who don' want anything to do with C+. 

Join the Largest Real Estate Investing Community

Basic membership is free, forever.