Solid B Class Properties for Newbie Long Distance Investor

13 Replies

Hi there BP!

I'm hoping that you all can give me some insight on whether my current plan of attack is a good one. I'm getting my feet wet with my first long distance investment and hoping to buy my first property in the Indy market. I'm looking for a long term, relatively stable SFH that I might someday be able to manage myself remotely. I'd ideally get about $150 per month cash flow at this time using a property manager.

I think my best bet is to invest in a solid B class neighborhood with a house in the $110-$135k range. Looking at Sterling White's helpful post, it looks like my best bets are South, Northwest and Northeast of the 465 freeway and north of 38th street are all solid B areas. It looks like rents, at least according to the Zillow rent estimates I've seen, fall within the 0.8 - 1% RV ratio.

I know that is a large area, but are there any areas that people would recommend for a newbie like me to pursue? Equally important, any areas within there to stay away from due to lack of renter demand?

I'd also love to have recommendations for Realtors that have experience with remote investors in those areas.

Thanks!

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Thanks for your help! There seem to be a lot of houses for sale on the lower end of that range within a 4 block intersection of 38th and North German Church Road. There’s two houses listed off of Medallion drive near W 66th. I just don’t know if these are desirable areas for renters.

@Brad Semenoff I have an investor who just bought a SFH near that area (farther north a bit), a 4 bedroom and it was a desirable area for him in all his research. Up that way you have plenty of food/business/hospitals/golf etc.

Those homes you are talking about almost hit what you want return wise, but I would want to get that number closer to 100k purchase price

We've had good luck with C+ to B- duplexes in/around Irvington/Warren Park - but those places can be a little rough and block-to-block. I think if you're looking at SFH and solid B properties, you're probably looking in the right areas. The north end of town (from what I've seen and with the exception of a few pockets here and there) seems to be "where the money is" As @Joel Clausen said, plenty of food/business/hospitals/golf etc. up that way... some REALLY nice places we've visited when coming into town up there as a matter of fact. I'd say your probably even knocking on the door of "A" properties in may of those areas.
Good Luck

@Brad Semenoff No prob! Sorry, totally missed you were already looking at that map. I didn't realize it was Sterlings - someone else had sent me that link. He did a great job, I use it myself! 

In regards to the area you're looking at, personally, I'm not a huge fan of the 38th and Mitthoefer area, although I know you can get some decent returns. It's too close to 38th and Post for my liking (very bad area). The eastside can be a fine place to invest, but I'd recommend being above 42nd St. I just helped one of my investor clients purchase a SFR at Mitthoefer and 52nd a few weeks ago. He paid $59k and rent is $700.

In regards to your Franklin Twp and Southport question, I think the southside is a great area for investment. Mainly SFR rentals. Franklin specifically because it has really good schools. Overall though, there is a TON of development happening all over on the S side (mainly focused between 37 and 74 fwys). In fact, I have an investor client closing on a nice condo (well, one of those duplex style homes that have a shared wall) next Friday right near Southeastern & Fisher Rd. Paying $110k and rent should be right around $1000. This is his second southside purchase - the other was also a condo right off Thompson Rd and East St. Very similar numbers on that one.

@Shawn York is correct that the areas get nicer as you go north. That's across the whole city too. The proverbial train tracks is 38th St. Once you get above about 52nd from E to W through the city, it gets nice. Of course you'll have a few so-so pockets, but overall it's hard to go wrong on the N side of Indy. Pretty much all A and B areas. Once you get N of 96th St into Carmel, Fishers, Zionsville, etc, then it's basically all A areas. But, unfortunately from an investment perspective, they don't cash flow well. Many not at all. Of course there are rare exceptions (I own a great 4 unit in Carmel), but generally speaking I'd stick to the "middle" part of the city or southern side. 

@Brad Semenoff Congrats on getting started! I live in Southport( Frankling Twnshp)  and my portfolio is spread across different property classes in Indy. Sterling's map is a great place to start. I'd also recommend taking a trip to Indy to know what you're getting into or who you're planning to have as your team. I recently acquired 4 properties that are in the B area and that's what i'd recommend for out of state folks. You will have some cash flow but your turnovers will be minimum and appreciation would help you in the long run.

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