I am interested in Indiana looking for some more information
Rental Property Investor · Bountiful, UT · Member since 2015 · 5 posts · 1 vote
I am new to bigger pockets. My family and I have been investing here in the Salt Lake City area for the last 6-8 years. I love investing here, but I wanted to look into areas that might provide a little better income off my investment. I have been looking at few different areas and I am very interesting in the state of Indiana. I was hoping to get some information on what other investors are finding successful in the Indy area and maybe some other area such as south bend, West Lafayette, and maybe the northeast part of the state like Chesterton, etc.
What areas are you guys seeing success in?
Do you recommend single family homes or 2-4 unit multi family properties? What kind of returns/cash flow are you seeing on these investments?
What areas should I avoid, etc.?
Any information will help. Thanks for your guys input.
Jason
It seems like the whole planet has Indianapolis in it's sights - and they are right to do so!
We still have affordable homes [under $70k that rent for $800+] and lots of jobs and even more renters.
With that said, I always suggest looking within an hour or two of your home. The are usually great opportunities in nearby small towns.
Second, how is it that rents and values are not skyrocketing with all the "small buyers and all those other poor investors" clamoring to "invest"? You see what is happening to SF rents and values because of documented demand. And on top of that there is billions in new residential construction. Can you tell me what new residential construction is happening in Indianapolis?
SF rents and values make buy and hold investing unattractive. Thats why people come to the midwest.
Second, how is it that rents and values are not skyrocketing with all the "small buyers and all those other poor investors" clamoring to "invest"? You see what is happening to SF rents and values because of documented demand. And on top of that there is billions in new residential construction. Can you tell me what new residential construction is happening in Indianapolis?
SF rents and values make buy and hold investing unattractive. Thats why people come to the midwest.
What's unattractive here? I just posted this in another thread.
anyone that is touting this silly rule is probably trying to sell you a crappy unprofitable property. In another thread I posted the flat rents in Indianapolis for eight years. So if we do the numbers and even give them the generous 2% rule then the $789 rent means a value of $39,450 and is the same 8 years later yet the building is wearing and expenses are increasing every year. The only thing staying the same is the rents and value.
Now I posted rents in San Francisco https://www.rentjungle.com/average-rent-in-san-fra... If rents are at .5% in 2009 then the property costs (for the 2 bedroom, $1,840 rent) $368,000. Now just 6 years later with the rent increased to $4,385 you have $2,545 MORE money coming in each month and at .5% rent ratio your property is probably worth $877,000 !!!!!!!!!!!!! See, the rent ratio is a COMPLETE HOAX! You need to look for the change in rents. $509,000 in appreciation and $2,545 more rent each month vs, a slowly depreciating asset in the mid west.
You guys keep getting suckered into Bob's trolling!
Rusty, you are the "yes my real name is Rusty" Rusty right? It's me little Rusty, your, I thought, Hoosier buddy. I just posted some information and made some comments and you feel name calling is appropriate? That hurts. Do you really think it's fair to call @Ryan Mullin and @ Shawn Holsapple suckers? You know your Ma taught you better.
Nah, Bob, it's all good, just poking some fun. You're a good guy. As are Ryan and Shawn!
I will agree that investing here takes a bit more discretion. There are many areas that have seen great appreciation, and others have seen none. I know as I own in both. Nobody is going to mistake the Indy RE market for SF.
Bob, you keep posting about SF....but you fail to mention anything about the rent controls that are wildly prevalent there. Most landlords have no ability to raise rents once tenants are in, beyond what the board allows, nor can they ever get rid of them if they choose....outside of pulling their property from the rental market entirely. So nobody actually achieves those ridiculous rent increases you posted.
For the last year, you could raise rents 1.9%.
Bob, you keep posting about SF....but you fail to mention anything about the rent controls that are wildly prevalent there. Most landlords have no ability to raise rents once tenants are in, beyond what the board allows, nor can they ever get rid of them if they choose....outside of pulling their property from the rental market entirely. So nobody actually achieves those ridiculous rent increases you posted.
For the last year, you could raise rents 1.9%.
Rusty, rent control is limited to certain age and type of residential units. Rent control units are sold and TAXED with the knowledge of the restrictions so they are not sold at the value that a market rent (ridiculous) unit would get. If you don't want to deal with rent control it is easy to avoid them.
@Account Closed and others can confirm this information for you. Or just check Craislist.
I don't know if the survey I posted includes rent control units but if it does then that would actually bring the rents they are reporting down.
Hi and welcome to BP! I was just in Indy for a look see, and their are some good opportunities for cash flow turnkey investing. I am also finding even better opportunities in NW Indiana, Chicago suburbs.
Hey Larry,
What areas in the NW Indiana are you seeing good opportunities? I have been interested in this are as well.
Thanks,
Jason
Lake County.
@Account Closed@Ryan Mullin
So My Wife roped me into watching the bachelorette last night, And reading this forum is a lot better than that was... but with more drama.
I am an Indiana Boy, so I guess I have a biased opinion on the subject, however I am also one with not a whole lot of $, and I just can dabble here and there in real estate, buts it hard to keep with up with "Big Dawgs" in this game. But I can give my opinion...
So Bob mentioned having 368K, and buying a 2 bedroom, And (He bought that when the time was really right 2009, Especially in California when the market had tanked) and he was getting a gross market rent of $1840... Sounds pretty good, but I am personally buying single family homes in Indy, renting for $700 per month for about 40K apiece (really 30K, but we will be conservative for this forum), and if it was 2009, I was buying them at around 25K apiece. So if I had 368K I would rather buy 9.2 Single Family homes (Renting for $700 apiece) in order to get $6440 per month instead of the $1840 per month in 2009. And now your rent in 2015 is $4385? That's pretty good rent, but if someone one wanted to buy that house, they would have to pay $877K as that's what the market says it's worth ad someone would pay that? If I had 877K today, I would rather buy 21.9 Single family homes in Indy for 40K apiece renting for $700 per month equaling $15,347 in market rent..
Also, One quick question? What was the San Francisco house worth in 2006?
So I guess I like it here in Indy so I can get more for my Dollar $$$.
This is where I personally would rather put my $, but I don' tell anybody what to do with theirs, as it's all up to the individual and what makes sense to them?
Thanks for the info, very interesting reading.
Brett
Bob, you keep posting about SF....but you fail to mention anything about the rent controls that are wildly prevalent there. Most landlords have no ability to raise rents once tenants are in, beyond what the board allows, nor can they ever get rid of them if they choose....outside of pulling their property from the rental market entirely. So nobody actually achieves those ridiculous rent increases you posted.
For the last year, you could raise rents 1.9%.
Rusty, rent control is limited to certain age and type of residential units. Rent control units are sold and TAXED with the knowledge of the restrictions so they are not sold at the value that a market rent (ridiculous) unit would get. If you don't want to deal with rent control it is easy to avoid them.
@Account Closed and others can confirm this information for you. Or just check Craislist.
I don't know if the survey I posted includes rent control units but if it does then that would actually bring the rents they are reporting down.
Bob, I'm certainly no expert on SF real estate. It was my understanding that anything built prior to 1979 and 2+ units fell under control of the rent board. Would seem you'd need to get out of the actual city into the greater bay area to get away from that, how many true SFHs are rented out and how many units are post 1979 actually within the city?
What rent controls do, it seems, is distort the market, by greatly limiting the market value supply of units. I've read there are something like 30k units in the city that owners leave vacant rather than deal with the rent boards, as it is such a liability being a landlord there.
I only have some anecdotal experience talking with a couple people who own these type of units.
@Account Closed@Ryan Mullin
So My Wife roped me into watching the bachelorette last night, And reading this forum is a lot better than that was... but with more drama.
I am an Indiana Boy, so I guess I have a biased opinion on the subject, however I am also one with not a whole lot of $, and I just can dabble here and there in real estate, buts it hard to keep with up with "Big Dawgs" in this game. But I can give my opinion...
So Bob mentioned having 368K, and buying a 2 bedroom, And (He bought that when the time was really right 2009, Especially in California when the market had tanked) and he was getting a gross market rent of $1840... Sounds pretty good, but I am personally buying single family homes in Indy, renting for $700 per month for about 40K apiece (really 30K, but we will be conservative for this forum), and if it was 2009, I was buying them at around 25K apiece. So if I had 368K I would rather buy 9.2 Single Family homes (Renting for $700 apiece) in order to get $6440 per month instead of the $1840 per month in 2009. And now your rent in 2015 is $4385? That's pretty good rent, but if someone one wanted to buy that house, they would have to pay $877K as that's what the market says it's worth ad someone would pay that? If I had 877K today, I would rather buy 21.9 Single family homes in Indy for 40K apiece renting for $700 per month equaling $15,347 in market rent..
Also, One quick question? What was the San Francisco house worth in 2006?
So I guess I like it here in Indy so I can get more for my Dollar $$$.
This is where I personally would rather put my $, but I don' tell anybody what to do with theirs, as it's all up to the individual and what makes sense to them?
Thanks for the info, very interesting reading.
Brett
Brett, I don't care where you or anyone else invests. I just put some numbers out there because it is repeatedly said that CA is not profitable JUST because it is expensive. Looking at your numbers of 9,2 Indy homes makes me cringe. I see 9,2 times closing costs, 9,2 roofs, 9.2 times the plumbing calls, 9.2 times the eviction costs, 9.2 times more paintig, 9.2 times the HVAC's !!!
So after 6 years your 9.2 properties are still worth only $368,000 and rents that are unchanged but you have collected and paid taxes on more rent at the start. After 6 years I have $500,000 tax free dollars.
http://www.mortgage-investments.com/resources/onli...
I would suggest everyone run the competing scenarios thru this worksheet. Remember the Indy expenses will be almost 10 times higher than SF and rent growth 6 times less and appreciation 9-11% less. I think you will discover that SF is more (way) profitable.
FYI if anyone is going to do the figuring the SF rents from 2009 to 2015 have increased over 15.5% compounded yearly. My figures going back to 1986 for SF were closer to 7% as of 2012 ish so the growth maybe overstated at 15.5% but 7% may be understated slightly.
@Account Closed
Do you still have that House that I can Buy for $877,000? Because if you are correct in your numbers, and the market in San Francisco keeps that rate.... Wow, That Means in 2021, the rent will be $10,436 per Month, and that would be really Awesome, And the house will be Worth $2,087,260, And That does Sounds Really Awesome, So, Maybe SF is the place to buy with those returns... I know that I couldn't ever afford to live there though, as I live in a 2006 Built, 2500 Square foot home in the suburbs of Indy I bought for 90K, But I would like to invest in SF with those returns.. Do you predict the market will continue in this fashion, or do you predict differently, or maybe a big depreciation might come in the future?
@Account Closed
Do you still have that House that I can Buy for $877,000? Because if you are correct in your numbers, and the market in San Francisco keeps that rate.... Wow, That Means in 2021, the rent will be $10,436 per Month, and that would be really Awesome, And the house will be Worth $2,087,260, And That does Sounds Really Awesome, So, Maybe SF is the place to buy with those returns... I know that I couldn't ever afford to live there though, as I live in a 2006 Built, 2500 Square foot home in the suburbs of Indy I bought for 90K, But I would like to invest in SF with those returns.. Do you predict the market will continue in this fashion, or do you predict differently, or maybe a big depreciation might come in the future?
AHAHAHA... Yeah... Put me down for 2 or 3..
How do I triple vote for this..?
FYI if anyone is going to do the figuring the SF rents from 2009 to 2015 have increased over 15.5% compounded yearly. My figures going back to 1986 for SF were closer to 7% as of 2012 ish so the growth maybe overstated at 15.5% but 7% may be understated slightly.
I would think 7% is a lot closer to reality than 15%. Looking at Cali RE from 2009 to 2015 is pretty good cherry picking, considering 2009 was a once in a lifetime type scenario. One could have tripled their money in the SP500 from March 2009 to March 2015, with a lot less effort.
The question for everyone here is where to invest NOW. If historically, SF rents increased by 7%, it's entirely possible that they are entering a period of near zero growth for several years to come. At some point fundamentals such as median income do come into play.
OK wiseguys. This is straight out of last Sundays newspaper. You know, that thing adults read. No manipulation by me. See those before prices? Now calculate the appreciation. Sucks to be in Moms basement figgering yer $25,000 empire. Lol
FYI if anyone is going to do the figuring the SF rents from 2009 to 2015 have increased over 15.5% compounded yearly. My figures going back to 1986 for SF were closer to 7% as of 2012 ish so the growth maybe overstated at 15.5% but 7% may be understated slightly.
I would think 7% is a lot closer to reality than 15%. Looking at Cali RE from 2009 to 2015 is pretty good cherry picking, considering 2009 was a once in a lifetime type scenario. One could have tripled their money in the SP500 from March 2009 to March 2015, with a lot less effort.
The question for everyone here is where to invest NOW. If historically, SF rents increased by 7%, it's entirely possible that they are entering a period of near zero growth for several years to come. At some point fundamentals such as median income do come into play.
Rusty , cut me some slack. I used 2009-15 because that was the period rents were reported. I took the initiative to calculate and offer a 40 year experience analysis lest any yahoo think I'm predicting 15.5% forever.
Over 40-50 years a few years of 15.5% is not going to skew the rate that much. So maybe rents will only increase 5% for a few years. Comparing leveraged REI returns to the stock market is meaningless. Median income is not a strong fundamental in SF. Remember the buyers are worldwide and move up buyers have hundreds of thousands of dollars of equity to put down on their purchase. Did you see the recent sales I posted? How about that $550,000 increase in just 3 years!!!
https://youtu.be/lDppeMt0FeQ
Everybody sing!
@Account Closed
Do you still have that House that I can Buy for $877,000?
HOUSE!? LOL. I might be able to get you in this 2/1 apartment but remember properties are generally overbid by the hundreds of thousands! Get you coin together cause we don't wait around for penny counters or mess with lookie loos.
Bob,
Yes it looks like it's been an awesome time to invest in sf since the crash and it certainly has done better than the Indy market. However,keep in mind the hot appreciation markets such as SF get killed in down markets. What happens when that newly purchased 2 bedroom flat that was purchased at 800k is only worth 500k? And the rents aren't enough to pay the mortgage so now the landlord has lost 300k in equity, has a house he needs to put money in each month because the property doesn't cash flow and to add insult to injury he is now land lording in one of the more unfriendly landlord states in the country? Indiana that doesn't happen worst case scenario you buy a cash flowing property at 60k and in a downturn maybe it's only worth 50k. But because our properties actually cash flow the landlord still goes to the mailbox, pays all expenses on his property and still puts money in his pocket. It's a different market one is about consistent cash flow and another is about speculating on appreciation. It doesn't necessarily mean one is superior to another. Just different goals.
Bob,
Yes it looks like it's been an awesome time to invest in sf since the crash and it certainly has done better than the Indy market. However,keep in mind the hot appreciation markets such as SF get killed in down markets. What happens when that newly purchased 2 bedroom flat that was purchased at 800k is only worth 500k? And the rents aren't enough to pay the mortgage so now the landlord has lost 300k in equity, has a house he needs to put money in each month because the property doesn't cash flow and to add insult to injury he is now land lording in one of the more unfriendly landlord states in the country? Indiana that doesn't happen worst case scenario you buy a cash flowing property at 60k and in a downturn maybe it's only worth 50k. But because our properties actually cash flow the landlord still goes to the mailbox, pays all expenses on his property and still puts money in his pocket. It's a different market one is about consistent cash flow and another is about speculating on appreciation. It doesn't necessarily mean one is superior to another. Just different goals.
Why does my $800,000 property have to burn down for your Indy properties to be more profitable?
Sorry, @Jason O'Toole it looks like your thread has been high-jacked!
I'm not sure what the values of SF properties has to do with your original question?
Jason,
You should consider reaching out to your brother Sean O'Toole since he's the king of data. Kidding aside, just keep in mind that everything in life has a price. Things are expensive for a reason so are cheap. It seems like everyone is in the sales business and always have things to sell to you. However, I have learned that no one takes better care of your money than you do. I like the suggestion that you should start out investing in your local market or closer to home. The best is being able to buy assets at a discount. Make money when you buy will give you more options. More options are always good.
We, as human, tend to take the path of least resistance. Nevertheless, the path of least resistance will likely turnout to be rockier than we have anticipated and prepared for. Once we realized that the grass is not greener on the other side, the damage has been done. A bad financial decision can set us back a decade. Fortunately, a good financial decision can accelerate us to our financial freedom much faster.
Let me leave you with my favorite quote from Master Oogway "One often meets his destiny on the road he takes to avoid it."
Best of luck with your real estate endeavors.
Hey guys how bout some positive contribution. LOL! What can you tell me about this property?
http://www.realtor.com/realestateandhomes-detail/5...
Is it a walkable NBHD? Wow factor or a white elephant?
Would it be worth the trade?
@Account Closed
Bob, you enjoy toying with people don't you?
@Account Closed
Bob, you enjoy toying with people don't you?
I like a little jovial give and take. But I really am fascinated with this property. I mean the space is crazy! Biggest I've ever bought is a little over 1500sf. What do you think about the property?