Indianapolis areas to avoid

17 Replies

I've recently purchased a few properties in Indianapolis and have been getting a number of properties sent to me.  I'm looking to get feedback on areas (zip codes/parts) of town to avoid.   Any feedback that you are able to provide would be most useful.  Thanks in advance for your time. 

God bless,

Arturo Colmenero 

Hi @Arturo Colmenero , it sounds like what you are specifically asking for is the map from this BP article on Indy neighborhoods.

Reading between the lines, if you're looking for someone to vet wholesale properties, I'd start with the PM(s) you are using for your first few purchases -- assuming those are working out for you. If you are looking at turnkey properties, you probably should vet the provider first and the deal second. I've bought plenty of properties in Indy, sight unseen, because I trusted the team, not because I was intimately familiar with the neighborhood. 

@Ethan Anderson @Arturo Colmenero - I live in Indianapolis and invest in Indianapolis.  The map/description is not completely accurate.  You need to research your exact area because some of the map is way off.  You cannot cut up the city by zip codes.

Trulia's crime map is extremely useful/helpful when looking up properties in different areas. I live in Indy but not familiar with all of the different downtown neighborhoods, so this is the first place I always look! 

Ethan. Thank you, the article is very informative. I had some knowledge of a number of the areas, but what a great resource. We have a property management company that takes care of the properties for us. Have several deal sources and trying to find a way to limit what they send me. Figured if I can eliminate certain parts of town I can streamline the evaluation process. I agree having a team in place is vital, I believe we have a pretty good one in place now.

Kerry. I sent you a message.

Dan. Thank you for the insight. Are you open to me reaching out reaching out to you on occasion for some feedback on potential purchases?

Kathryn. Trulia heat maps are something I utilize for almost every property, it truly is a great tool. What parts of town are you most familiar with? 

Quality here can be very different block to block, street to street. It's hard for an out-of-stater to tell the good from the bad, and especially to find promising bargains by nibbling around the fringes of the good areas, getting in the path of progress, etc. 

There are some large areas that are pretty reliably bad, but those are also the areas where OOS investors can easily find inexpensive properties. 

If you want to message me where your properties are, I can tell you what I know, if anything.  

Another thing to keep in mind is that the city has experienced rapid change over the last few years. This is from a 2-year-old post: "I tend to have stay-away zones for example North: between 30th and 38th, east/west between Crown Hill and Fall Creek." (note: Crown Hill to Fall Creek is actually west-east). 

Some of that still applies, but the easternmost part of that zone comprises Mapleton-Fall Creek and East Fall Creek. Mapleton Fall Creek has been rehabbed and gentrified at a stunning pace over the last few years, and East Fall Creek was in better shape to start with, I think, and has also come up. 

We bought a lot of stuff in both areas at good prices a few years back, but those deals are just not there anymore. The area is still mixed, but it has made amazing progress, and my feeling is that it is past the tipping point and will continue to improve. Now it might still be considered a "stay-away zone"...because it is priced out. 

We have one nice house on a charming block right in the heart of what ten years ago was called "The Murder Triangle," which gives you sort of a feel for the change that has occurred. 

The westernmost part of the zone described above is still probably not a place you want to invest in or spend your vacation. 

my recommendation to all investors whether they live in Indianapolis or not is to focus on two to three areas become an expert on those areas how large those areas will be depends on your own ability. If you're out of state I would strongly encourage you to come and visit for a long weekend. I see so many investors who bring me properties to manage because they thought they were good based on the marketing flyer and the unfactual proformas only to find those properties could never make a positive cash flow this is a big investment and I feel that it is critical for long-term success to see things for yourself at least in the beginningl

@Arturo Colmenero Crime maps are a good place to start as well as the neighborhood map. It gives a good general idea of the market. However, in order to get the street by street knowledge, it's important to have your team look out for you. Once you have a team established, they should be able to steer you away from bad areas. I highly recommend taking a trip over a weekend to get a feel for what you're signing up for. 

Just inbox me. I'll share the ins and outs of every Indianapolis neighborhood with you.

Originally posted by @Harvey Levin :

my recommendation to all investors whether they live in Indianapolis or not is to focus on two to three areas become an expert on those areas how large those areas will be depends on your own ability. If you're out of state I would strongly encourage you to come and visit for a long weekend. I see so many investors who bring me properties to manage because they thought they were good based on the marketing flyer and the unfactual proformas only to find those properties could never make a positive cash flow this is a big investment and I feel that it is critical for long-term success to see things for yourself at least in the beginningl

I know one very successful OOS  guy who spends so much time here that he is on a first-name-basis in more pubs and restaurants than I am. Knows the neighborhoods block by block. The guy flies in from 1100 miles away, keeps a pickup in storage here; spends months here every year, working on his properties, driving around, going to meetups, getting to know wholesalers... 

He's still at a disadvantage compared to a local, but not by much, because of the way he has educated himself. 

@Arturo Colmenero If you're going to continue to invest in Indianapolis, you really need to visit the market and get to know the areas rather than rely on advice from others on the forum. If for no other reason than the fact that Indy has become a very competitive market and good deals go fast. You have to be able to recognize a good deal and react quickly or you'll lose out.

As @Harvey Levin said, my best investors visit the city every year and some do it multiple times each year. Some or all of these trips can be written off on taxes as well, so consult your accountant.

As mentioned, Trulia's maps are a great place to start. Crime is my number one indicator on most homes, but I also look at Median Household Income, Education Level, and Percentage of Home Ownership as well as they drive many of the factors for desirability and appreciation.

Second place to look will be Zillow, Homesnap, and/or Rentometer to get an idea of the rental markets (if you're investing in rentals.) Look for areas with rentals above the median. Typically, 2 bedroom homes that should rent at $700+/mo, 3 bedroom homes that will rent for $800+/mo, and larger homes that will rent at $900/mo or more. Multi-families will go by different numbers... usually about 10% lower than SFR's.

Then I like to look up the address and about a city block of that street in the enforcement and permit database https://accela9ca.indy.gov/citizenaccess/ to get an idea of the problems in the area and outstanding city issues with the home (these should be cleared up at closing.) Basically, if you have 2 homes on the neighborhood that get investigated several times of the year for illegal dumping, abandoned vehicles, vacant board orders, or high weeds/grass... it's probably a more distressed area.

I also walk the street on Google Earth to ensure that I'm not across the street from a metal recycling facility, railroad tracks, waste water treatment center, landfill, trucking warehouse, etc.

Another interesting look is to use Google Maps to find all of the Starbucks in town. Draw a 3 mile circle around all of them. Then look up all of the Pawn Shops, Check Cashing Places, and/or Payday Advance areas and draw a circle around those as well. Commercial entities, like Starbucks, do much more research in areas that we do. They target areas where people have extra money for luxury. Pawn shops and check cashing places tend to be in neighborhoods where people struggle to pay their bills.

After learning how to do some adequate pre-screening, a good PM can give you further insight, but we can't go through lists of 30+ properties to do potential deal evaluations for all of our clients. You have to do the initial work yourself, we do have a company to operate.

Lastly, have someone physically walk a street and count the number of apparent boarded up/distressed houses. If there are more than 2 in the immediate area and more than 5 on a block (a decent PM can probably help with this)... I typically recommend passing unless there are active rehabs going on at those homes.

Now, this applies differently if you are a Section 8 investor. @Harvey Levin can be great help in that matter as he is a section 8 specialist in town.

Hope that gives you some pointers.

Great post @Ross Denman It's nice to know that some companies are performing quantitative and qualitative analytics ensuring delivery of quality products and services. In a hot market like Indy where so many OOS investors are shopping hopefully they manage to find you and not some of the quick deal sellers taking advantage of the OOS investors.   

@Ross Denman thank you for these great ideas! I kind of "knew" about the Starbucks trick, but I like the idea about searching within a radius and looking for pawn shops as well! Excellent advice! 

@Dan Perrott , I'm curious about your comment that some of the map is way off.  I had understood that the map was fairly updated and was broken down by neighborhood, not necessarily zip code.  What parts of the map are way off?  Thanks for your insight.

@Bryan Zuetel - looking at just zip code 43236 (NE side of Indy) - it is listed as a C area in the analysis.  This zip code is huge and can range in areas from D in the south all the way to A++ areas in the north.  This analysis breaks down by zip code where the areas should be broken down street by street.   This breakdown is listing by household average income as the primary driver - income alone does not make an area A, B, C...  

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