How long will Indianapolis be HOT ?

23 Replies

How  long will it be before the market cools down ? What are some of your investment strategies in indianapolis ? 

Hopefully not much longer.

Actually it seems noticeably less hot than it was a few months ago.

Sit on your cash.

@Sam B. That’s true I have noticed my investors have slowed down just a bit. Thanks for your response 

I think the reason the market has cooled down because most of the investment properties are now price so high  it's very difficult to actually have a good return on your investment

I think it's cooled a bit too but historically August is always slow due to schools opening. It will pick back up in September before diving in the winter.

Totally agree with @Neil Goradia . We always hit a slump in August due to back to school/end of summer. Things usually pick back up after Labor Day.

But...with that said, I am noticing some slow downs in the market that may extend beyond the aforementioned reasons. Can't quite put my finger on the reasons yet. I do agree with Harvey as well that some of it has to do with the rapid price increases on the investment properties over the last couple of years. $40-50k flips are now selling for $90-100k - nearly doubled in 2 years in some areas. 

@Peter Stewart What are your thoughts on the Mapleton-Fall Creek neighborhood for next 5 years? I lived there 3 years ago and I'm considering that area for investing. 

@Jaron Walling I love MFC. I invest there myself. I have two lots I'm going to build new construction on. One on Ruckle, the other on Talbott. I have clients who have flipped multiple properties there as well. 

I think the area is only going up, especially with all the money getting pumped into Midtown ( I think the Red Line will also help. 

@Peter Stewart  That's great man and exactly what I was thinking. Thanks for the response.  

It is not just Indianapolis, many cities are showing slow down.  Don't believe this is August affect. 

@Jaron Walling Mapleton Fall Creek is great!  Been putting my money in there and I've ramped it up. 

This is normal for "back to school"  - retail drives it. Otherwise, there is also a moderate pricing correction.  It's a good thing.  From the investment point (not retail), too much greed.  It's a matter of those who sell, thinking they need to totally kill it on every deal.  It went on way too long and it's not a good business model for the long haul. Difference between the pretenders - the get rich quick people and the real business people.  My pipeline shows alot of positive for November, December, & January. For buyers like me, it's about evaluation. 

I have began steps working with my network to virtual wholesale in other markets....

@Ritch Bonisa Today marked a milestone for me personally. I made my first offer on a bank owned property! It's going to be a buy and hold rental after rehab. Hopefully the seller wants to play ball because I offered $23k below list. 

@Jaron Walling I've seen alot of wholesalers with inventory just sitting there lately.  I think your approach is right on.  Another issue with the higher prices has been that many properties are being sold on contract.  Sometimes this leads to astronomically high prices - if it doesn't sell at the high price point - the contract just expires, so the "seller" has ventured nothing and lost nothing. There are still great deals available in Indianapolis, but selling on contract and some of the turnkey stuff has become more difficult to make some deals work.  Rents are great right now!  I still really like this market.  Congrats!  Hope your offer is accepted!

I am finding that most of my local investors are "looking to sell" some of their properties that they have had for a while, but only because they believe the price will never be higher.   I have a guy looking to sell a few of his Broad Ripple properties that he bought over 10 years ago that are still cash flowing and have great renters, but he would sell them if someone really wanted to give him what the homes are actually worth....problem is, they don't really hit the 1% rule and are not "deals" like most investors want.  This particular investor bought at a great time and has paid for the homes 5x over, and if someone really wants them, they are for sale.  So I think, what many have said, that the properties that are currently out there for sale are at the very top of the price point and they don't really make sense, number wise, for other investors to buy them.  There are still some very good deals out there, some solid cash flowing properties....they just are not hitting that 100 months mark...more like 120. 

@Ritch Bonisa Thanks a lot man. I hope so otherwise I'll pass on the property because it needs work.  

@Joel Clausen I live in Broad Ripple near the dog park on 62nd st. I agree with what you said. The houses in that neighborhood are great but I can't afford them. In my opinion they don't make sense as profitable rentals in today's market. That could always change. Someone that's "paid for the homes 5x over" has done really well. That's inspiring for a novice like me. 

@Jaron Walling   .... those little two bedroom homes up there near you (north of you) are starting to come up on the market now.  They are only two bedrooms but continue to pump out renters left and right.  Smaller homes, smaller prices, but still rent well... might be a good starter for someone like you!

Yeah, the guy with the Bripple homes would probably be better off selling them as a single family home once the renters leave, instead of trying to sell them as rentals to investors.  

@Joel Clausen That sounds like a great idea man. I would expect the rental rates to grow or at least stay the same in Broad Ripple. It's growing like a weed. Last weekend we went to Joella's Hot Chicken; wow it's good and there's a balcony view of the White River. 

As a TK operator, we are seeing no slowdown.  We are in C-class, near (but not in) some of the gentrifying areas.  We can't get properties rehabbed and rented fast enough....selling everything we get.  

Definitely a slow down right now from what I'm seeing as well.  We went from summer straight to winter though as well it seems, and obviously this starts to become that slower time.  I'd have to agree with @Peter Stewart on MFC - it seems to be absolutely thriving. Also, I keep trying to find something to BRRRR under $80k or so, and it seems more and more difficult to find. A lot of the homes in certain areas (Lawrence Twp, Little Flower, Irvington, Bean Creek, Christian Park, etc.) are being listed for a premium (i.e. $60k, $70k) with plenty of work left to be done to them when resale history shows the most you'd get is maybe $80k or $85k. It's crazy to think that investors are going in on these homes and truly coming out with positive cash flow or making any money at all. I have no room to force appreciation to refi out of that BRRRR.

@Chad Meyer Exactly! That's part of reason I'm looking at REO properties.

@Omari Heflin it depends on how you're defining hot. If you are talking about appreciation, that's already slowed down as it has in many markets. If you're talking about investor demand, I think it will remain a hot market for quite some time. Indianapolis has one of the best combinations of strong economic/demographic trends and good cash flow and I don't see that changing. As long as you have those factors, it's going to attract a lot of investors. I've been involved in the Indianapolis market for nearly 10 years and it has been strong that whole time. 

Inbox me your criteria and let me know what your investment strategies are and I'll see if I can find somethings for you. 

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