is investing in Indianapolis now the correct thing to do?
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Rental Property Investor · Long Beach, CA · Member since 2015 · 623 posts · 155 votes
7y@Gil Ganz Indy is a very diverse city in terms of real estate, you have areas that have skyrocketed in the last few years and areas that have only been dragged up a few % because the city as a whole is coming up and investors are buying based on spread sheet numbers not actual facts. Meaning even bad areas are seeing some appreciation. Some areas may have a negative forcast and for the most part that's probably murder alley and you most likely do NOT want to buy there. Additionally you need to learn where that is because sellers don't care that 10 blocks north is a descent area and they're selling in murder alley to them they just want to "get" you and they hope you don't know where the delineating streets are. So like @Jaron Walling said you need to see it or at the very least confirm with someone not profiting from the deal that it's an ok area.
I'm not the first one to say nor will I be the last but a PM is quite likely the most important cog in your machine. They can help you pick areas and give you insight into things you would have never considered.
If you have any questions about certain areas, PM's, agents or wholesalers, I'm happy to chat a little.
21 Replies
- 7yJaron WallingPro MemberRental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
@Gil Ganz Looking at property in Indianapolis is no different than any other city. You have to stick to you budget and numbers. Make realistic offers on properties in B-C class neighborhoods. The hot locations have been discussed numerous times. If the company is pitching you good property you need to see it in person.
I agree with some of that article. Properties in Broad Ripple for example were outta control during the summer. Anyone who purchased in that neighborhood OVER PAID and didn't care.
- Rental Property Investor · Johnstown, CO · Member since 2015 · 119 posts · 78 votes7y
We bought just a little less than a year ago in this exact price point. Our property now is looking at around $115k. We went in expecting ZERO appreciation - strictly buy and hold and expecting to make our money with cash-flow from rental income. So from our point of view, a little depreciation wasn't a major concern. If you're looking at long term buy and hold, the majority of your return is in rent, not appreciation - we simply lucked out by getting into an area that's on the edge of gentrifying. If our property had gone down 2-3% in the last year, we'd really be in no less of a worse spot since we were banking 100% on cash-flow.
There definitely are places that fit what you're after - but the secret seems to be out and they're harder and harder to find. I've only seen prices going up. Good luck! @Jaron Walling thank you for the quick response. of course any deal might be different, and one neighborhood might present better opportunities then another, i was wondering why when i searched for information about the city, i found multiple sources showing a price forcast which does not look good. do you have any opinion on that matter?
Originally posted by @Shawn York:
We bought just a little less than a year ago in this exact price point. Our property now is looking at around $115k. We went in expecting ZERO appreciation - strictly buy and hold and expecting to make our money with cash-flow from rental income. So from our point of view, a little depreciation wasn't a major concern. If you're looking at long term buy and hold, the majority of your return is in rent, not appreciation - we simply lucked out by getting into an area that's on the edge of gentrifying. If our property had gone down 2-3% in the last year, we'd really be in no less of a worse spot since we were banking 100% on cash-flow.
There definitely are places that fit what you're after - but the secret seems to be out and they're harder and harder to find. I've only seen prices going up. Good luck!70-80->115 in a year sure sounds sweet :)
i can understand what you are saying, long term hold without a loan, but why not try to find a deal where you can profit from both a rise in the house price and the rent? i agree, i'm in the same place as you i.e if i buy a property the price can go down even 10% and it won't matter to me, that's true, but is there a downside to looking for an option that maximize the possible gain i can get?- Rental Property Investor · Long Beach, CA · Member since 2015 · 623 posts · 155 votes7y
@Gil Ganz Indy is a very diverse city in terms of real estate, you have areas that have skyrocketed in the last few years and areas that have only been dragged up a few % because the city as a whole is coming up and investors are buying based on spread sheet numbers not actual facts. Meaning even bad areas are seeing some appreciation. Some areas may have a negative forcast and for the most part that's probably murder alley and you most likely do NOT want to buy there. Additionally you need to learn where that is because sellers don't care that 10 blocks north is a descent area and they're selling in murder alley to them they just want to "get" you and they hope you don't know where the delineating streets are. So like @Jaron Walling said you need to see it or at the very least confirm with someone not profiting from the deal that it's an ok area.
I'm not the first one to say nor will I be the last but a PM is quite likely the most important cog in your machine. They can help you pick areas and give you insight into things you would have never considered.
If you have any questions about certain areas, PM's, agents or wholesalers, I'm happy to chat a little.
- Rental Property Investor · Johnstown, CO · Member since 2015 · 119 posts · 78 votes7y
@Gil Ganz
Of course there is no downside to looking for a place where you feel you can maximize both the rent and the appreciation. If you can find such a place... more power to you. Like I said, we simply lucked into ours. And yes... very sweet :-)
In my mind, trying to find a place that's going to appreciate is a LOT harder and I would move from "investing" into "speculating" There's nothing wrong with hedging your bet and doing your research and trying to make sure you're not going into an area that's *completely* going to tank, but I've found that when you start speculating on future prices, you start down the path of just what you described... one piece of information says this, another says that... and they're both at odds with each other. - Investor · Cary, NC · Member since 2012 · 218 posts · 196 votes7y
If you look at the recent historical trends it's not hard to identify which markets are 'growth' and which are 'cash flow' type markets, and there are some that show characteristics of both. Indy would be much more of a 'cash flow' market where you can get better cap rates, but appreciation potential is more limited. It's hard to know if the article got the projection right quantitatively, but Indy has not been a growth market and so directionally that part looks correct.
Macro-level, the drivers to to growth markets are population shifts that are ocurring and a lot of people in northern states/cities have relocated to TX, FL, GA, NC, etc. And where there is marked housing shortages as in California, that too has driven prices up even if the population is not expanding as quickly. Where population is not growing fast (i.e. Indianapolis) and there is no supply constraint, then the appreciation will be limited. You can also look at the new build permit statistics by city to see where the building is ocurring and that will be key indicator as to which markets are growing rapidly.
Originally posted by @Jeb Brilliant:
@Gil Ganz Indy is a very diverse city in terms of real estate, you have areas that have skyrocketed in the last few years and areas that have only been dragged up a few % because the city as a whole is coming up and investors are buying based on spread sheet numbers not actual facts. Meaning even bad areas are seeing some appreciation. Some areas may have a negative forcast and for the most part that's probably murder alley and you most likely do NOT want to buy there. Additionally you need to learn where that is because sellers don't care that 10 blocks north is a descent area and they're selling in murder alley to them they just want to "get" you and they hope you don't know where the delineating streets are. So like @Jaron Walling said you need to see it or at the very least confirm with someone not profiting from the deal that it's an ok area.
I'm not the first one to say nor will I be the last but a PM is quite likely the most important cog in your machine. They can help you pick areas and give you insight into things you would have never considered.
If you have any questions about certain areas, PM's, agents or wholesalers, I'm happy to chat a little.
good point. i am going to do my research on the properties the company will send my way. since i'm not from the area eventually i need to trust someone i don't know personally..
Originally posted by @Shawn York:
@Gil Ganz
Of course there is no downside to looking for a place where you feel you can maximize both the rent and the appreciation. If you can find such a place... more power to you. Like I said, we simply lucked into ours. And yes... very sweet :-)
In my mind, trying to find a place that's going to appreciate is a LOT harder and I would move from "investing" into "speculating" There's nothing wrong with hedging your bet and doing your research and trying to make sure you're not going into an area that's *completely* going to tank, but I've found that when you start speculating on future prices, you start down the path of just what you described... one piece of information says this, another says that... and they're both at odds with each other.interesting viewpoint. i admit looking for the right market to invest on sometimes feels like a never ending train of pieces of information..
Originally posted by @Dan Rowley:
If you look at the recent historical trends it's not hard to identify which markets are 'growth' and which are 'cash flow' type markets, and there are some that show characteristics of both. Indy would be much more of a 'cash flow' market where you can get better cap rates, but appreciation potential is more limited. It's hard to know if the article got the projection right quantitatively, but Indy has not been a growth market and so directionally that part looks correct.
Macro-level, the drivers to to growth markets are population shifts that are ocurring and a lot of people in northern states/cities have relocated to TX, FL, GA, NC, etc. And where there is marked housing shortages as in California, that too has driven prices up even if the population is not expanding as quickly. Where population is not growing fast (i.e. Indianapolis) and there is no supply constraint, then the appreciation will be limited. You can also look at the new build permit statistics by city to see where the building is ocurring and that will be key indicator as to which markets are growing rapidly.
haven't thought about it like this, this makes a lot of sense. i was previously interested in a few cities in florida, then the growth forecast was looking good but the yields were lower then what it appears i can in indy. very interesting, guess i need to do some number crunching to see how the difference in yield can be compared to growth.
- 7yKerry Noble JrPro MemberInvestor · Indianapolis, IN · Member since 2018 · 2k+ posts · 1k+ votes
If you need any assistance feel free to connect......or you need me to stop by and take pics because googles pics are 6 years old feel free to get with me.....
- Investor · Denver, CO · Member since 2018 · 57 posts · 30 votes7y
@Gil Ganz I live in Denver, And it's hard to find a good deal because the market is overpriced at the moment. There still are good deals, but I find out of state deals to be more appealing. For that reason, I think investing out of state with a turnkey provider is better. However, if the numbers work and you can get good cash flow then do it.
- 7yJaron WallingPro MemberRental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
@Nathan Wankel I agree with you about investing out of state. Denver is an amazing city with so much to offer but if you're a new investor (like me) you're priced out. My boss just sold his house in Denver that was completely remodeled, 3bd, 2b, 1 car garage, for over $420K! They bought for about $150k 4 years ago...
- Developer · Nashville, TN · Member since 2016 · 484 posts · 406 votes7y
@Gil Ganz I moved to Indy 3 years ago from TX to start a Turnkey operation with my biz partner. We chose Indy because of the opportunity.... not so much for the appreciation, but because Indy has SO MANY things going for it for investors...
- low prices
- very good price-to-rent-ratios in the B class neighborhoods, and fantastic price-to-rent-ratios in the C class neighborhoods,
- low property taxes
- very landlord friendly laws
- major city with good transportation, good infrastructure, and solid employment
Notice that appreciation is not on the above list. That said, Indy is going through somewhat of a renaissance... there are pockets that are going crazy, but we are so focused on squeezing the most ROI/cash flow that we don't really worry about appreciation. Oh sure, we will buy next to gentrifying areas, and get some bleed-over. But, appreciation is ONLY meaningful when you sell or refi.
If you're doing Buy/Hold, there's not a better city in the country to do it... but you can't put appreciation into your numbers...it's conjecture/speculation, and you're doing yourself a disservice if you're using those numbers in your calcs for a buy/hold purchase.
Lastly, @Jeb Brilliant's comment about PM is spot on. We're now managing over 300 doors in Indy for ourselves and our investors, and that's where the real money is made. I'm amazed at how many investors get all wrapped up in how the deal looks today, but don't spend any time analyzing the processes that will go in to making their property perform on a long-term basis.
You are welcome to PM me if you want more insights.
- Real Estate Investor · Des Moines, IA · Member since 2016 · 922 posts · 533 votes7y
Hi Albert, I grew up in Indy for what it's worth. I have family there and it pains me somewhat to write this... But.... alas, what is, is:
Here's my reasoning for being quite a bit 'bearish' on Indy:
- In general I'm not overly impressed with my peers in high school who choose to stay around, relative to folks go got 'out' of the area. There are exceptions, of course (one extremely notable one), on both sides - however the real talent that builds value is by the numbers, somewhere else.
- I've had some anecdotal experience with very dysfunctional policing, and societal expectations that are not inclusive, and do not value a policy framework that fixes the below:
- Rampant non sustainable 'pockets' of extreme generational poverty, irreversible income and wealth disparities. Proximity and identification of higher worth asset pockets becomes difficult/volatile to predict.
- Political environment and societal expectations that can be borderline ideological with regards to the above
- If the crime does not get under control (see the above thoughts on education, gini, poverty, etc) this will weigh on perceptions and asset values for years to come
On the upside:
Indy is positioned well as a logistics hub which fueled growth, and it has a reasonably diversified economy.
There is access to high quality higher education in the area.
I will not invest in Indy although I did look at it awhile back.
Originally posted by @Jeff Schechter:
@Gil Ganz I moved to Indy 3 years ago from TX to start a Turnkey operation with my biz partner. We chose Indy because of the opportunity.... not so much for the appreciation, but because Indy has SO MANY things going for it for investors...
- low prices
- very good price-to-rent-ratios in the B class neighborhoods, and fantastic price-to-rent-ratios in the C class neighborhoods,
- low property taxes
- very landlord friendly laws
- major city with good transportation, good infrastructure, and solid employment
Notice that appreciation is not on the above list. That said, Indy is going through somewhat of a renaissance... there are pockets that are going crazy, but we are so focused on squeezing the most ROI/cash flow that we don't really worry about appreciation. Oh sure, we will buy next to gentrifying areas, and get some bleed-over. But, appreciation is ONLY meaningful when you sell or refi.
If you're doing Buy/Hold, there's not a better city in the country to do it... but you can't put appreciation into your numbers...it's conjecture/speculation, and you're doing yourself a disservice if you're using those numbers in your calcs for a buy/hold purchase.
Lastly, @Jeb Brilliant's comment about PM is spot on. We're now managing over 300 doors in Indy for ourselves and our investors, and that's where the real money is made. I'm amazed at how many investors get all wrapped up in how the deal looks today, but don't spend any time analyzing the processes that will go in to making their property perform on a long-term basis.
You are welcome to PM me if you want more insights.
thanks! will keep all this in mind
- 7yMike D'ArrigoPro MemberTurn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
Originally posted by @Jim Goebel:
Hi Albert, I grew up in Indy for what it's worth. I have family there and it pains me somewhat to write this... But.... alas, what is, is:
Here's my reasoning for being quite a bit 'bearish' on Indy:
- In general I'm not overly impressed with my peers in high school who choose to stay around, relative to folks go got 'out' of the area. There are exceptions, of course (one extremely notable one), on both sides - however the real talent that builds value is by the numbers, somewhere else.
- I've had some anecdotal experience with very dysfunctional policing, and societal expectations that are not inclusive, and do not value a policy framework that fixes the below:
- Rampant non sustainable 'pockets' of extreme generational poverty, irreversible income and wealth disparities. Proximity and identification of higher worth asset pockets becomes difficult/volatile to predict.
- Political environment and societal expectations that can be borderline ideological with regards to the above
- If the crime does not get under control (see the above thoughts on education, gini, poverty, etc) this will weigh on perceptions and asset values for years to come
On the upside:
Indy is positioned well as a logistics hub which fueled growth, and it has a reasonably diversified economy.
There is access to high quality higher education in the area.
I will not invest in Indy although I did look at it awhile b
Jim, It looks like you're letting emotions and ideologies mixed in with some anecdotal experience influence your perception of the market. With the exception of crime rates, I don't see how any of your other concerns effect investment and returns. You cite "rampant non sustainable 'pockets' of extreme generational poverty" however, every large market has those pockets. In fact, Indianapolis has a much lower rate of poverty than many other popular investment markets. Likewise with crime. Every major market has areas with high and low crime rates. The key is to invest in better classes of properties outside of these high crime areas. Indianapolis has done an excellent job of redevelopment and investing in infra structure pumping nearly $10 billion dollars in a mix of public/private redevelopment. Indy has become a model for other cities redevelopment.
I've been involved in the Indianapolis market for 8 years and have had a lot of success.
- 7yJaron WallingPro MemberRental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
@Mike D'Arrigo That's very true. I've lived in Indy for 5 yrs and agree. The improvements to bike lanes and trails have been nice.
- Investor · Indianapolis, IN · Member since 2016 · 232 posts · 133 votes7y
@Gil Ganz I know a couple of investors from Isreal who invest in my local market. I can connect you with them. They can provide a better perspective on how things worked for them, what worked and what didn't and what kinda returns they're seeing.
As far as any specific questions about the market or any "deals" you want to me run by, feel free to connect and I'd be happy to share any info I have.
- 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Mike D'Arrigo:
Originally posted by @Jim Goebel:
Hi Albert, I grew up in Indy for what it's worth. I have family there and it pains me somewhat to write this... But.... alas, what is, is:
Here's my reasoning for being quite a bit 'bearish' on Indy:
- In general I'm not overly impressed with my peers in high school who choose to stay around, relative to folks go got 'out' of the area. There are exceptions, of course (one extremely notable one), on both sides - however the real talent that builds value is by the numbers, somewhere else.
- I've had some anecdotal experience with very dysfunctional policing, and societal expectations that are not inclusive, and do not value a policy framework that fixes the below:
- Rampant non sustainable 'pockets' of extreme generational poverty, irreversible income and wealth disparities. Proximity and identification of higher worth asset pockets becomes difficult/volatile to predict.
- Political environment and societal expectations that can be borderline ideological with regards to the above
- If the crime does not get under control (see the above thoughts on education, gini, poverty, etc) this will weigh on perceptions and asset values for years to come
On the upside:
Indy is positioned well as a logistics hub which fueled growth, and it has a reasonably diversified economy.
There is access to high quality higher education in the area.
I will not invest in Indy although I did look at it awhile b
Jim, It looks like you're letting emotions and ideologies mixed in with some anecdotal experience influence your perception of the market. With the exception of crime rates, I don't see how any of your other concerns effect investment and returns. You cite "rampant non sustainable 'pockets' of extreme generational poverty" however, every large market has those pockets. In fact, Indianapolis has a much lower rate of poverty than many other popular investment markets. Likewise with crime. Every major market has areas with high and low crime rates. The key is to invest in better classes of properties outside of these high crime areas. Indianapolis has done an excellent job of redevelopment and investing in infra structure pumping nearly $10 billion dollars in a mix of public/private redevelopment. Indy has become a model for other cities redevelopment.
I've been involved in the Indianapolis market for 8 years and have had a lot of success.
Yup Morris found those pockets.. !!
- 7yMike D'ArrigoPro MemberTurn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
@Jay Hinrichs Indeed they did!
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