Mediocre Deal on a Duplex with a potential upside

Indianapolis, Indiana
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Mediocre Deal on a Duplex with a potential upside

Account Closed
Rental Property Investor · Indianapolis, IN · Member since 2020 · 562 posts · 554 votes

I found a mediocre deal on a duplex in Indianapolis (Marion County).  $128k, purchase price, Rent is currently $625 per unit which is just a bit below market.  Average is closer to $680 for the area.  Property will require some minor improvements.  The listing says that the adjacent lot is included in the deal.  When I search the tax records etc, and drive by the property, it does not look like a separate lot.  It is just a long narrow lot that happens to be on a corner.  So the duplex is built on the front, there is a driveway in the middle that basically splits the property into two halves, and the back is wide open with the exception of a utility easement.  Still plenty of room to build something between the drive and the utility easement.

My question is this. Does anyone have experience with Marion county? Wondering if they will allow you to split the lot into two and build another duplex or SFR on the back half? If not does Marion county allow for ADU's? The opportunity to develop the back half of the lot could potentially make a mediocre deal kinda sweet. Especially if I can split it. Then I can either sell the land, or build something on it and increase cash flow, or build and sell.

Just kicking tires at the moment.  Not super deep into the deal.  Mostly curious about what Marion County will allow before I dive in to the specifics.  Any insight is greatly appreciated.  

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Shawn York
Rental Property Investor · Johnstown, CO · Member since 2015 · 119 posts · 78 votes
6y

I'd call Marion County. I've actually had better luck that you'd normally thing in getting answers when I've called. Having said that, this is probably a little more involved than the questions I've asked in the past.
Good Luck.

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  • Shawn York
    Rental Property Investor · Johnstown, CO · Member since 2015 · 119 posts · 78 votes
    6y

    I'd call Marion County. I've actually had better luck that you'd normally thing in getting answers when I've called. Having said that, this is probably a little more involved than the questions I've asked in the past.
    Good Luck.

    1Reply
  • Peter Davis
    Member since 2018 · 14 posts · 4 votes
    6y

    Hi Dave -

    I primarily invest in Indy with a partner and what we’ve found is that the cost of new construction is hard to justify in much of Indianapolis (unless you get in the more pricey areas). 

    We’ve found the return is better to buy and do light rehab or add a bedroom, etc rather than build something new on an empty lot.   


    If the cost of construction makes sense in this case then you could definitely be onto something with a nice value add, just giving my 2 cents on what we’ve seen and experienced.   Best of luck to you.   

    1Reply
  • Account Closed
    OP
    Rental Property Investor · Indianapolis, IN · Member since 2020 · 562 posts · 554 votes
    6y

    @Peter Davis thanks for the input. I actually found a couple companies that prefab ADU's and drop them on your foundation, so it reduces new construction costs quite a bit. Still running some preliminary numbers, but it seems like it could have potential.

    Will see what the city says about it and will let you know if the numbers work out.

    0Reply
  • Nick GiulioniPro Member
    Rental Property Investor · Carmel, IN · Member since 2016 · 1k+ posts · 615 votes
    6y
    Originally posted by @Account Closed:

    I found a mediocre deal on a duplex in Indianapolis (Marion County).  $128k, purchase price, Rent is currently $625 per unit which is just a bit below market.  Average is closer to $680 for the area.  Property will require some minor improvements.  The listing says that the adjacent lot is included in the deal.  When I search the tax records etc, and drive by the property, it does not look like a separate lot.  It is just a long narrow lot that happens to be on a corner.  So the duplex is built on the front, there is a driveway in the middle that basically splits the property into two halves, and the back is wide open with the exception of a utility easement.  Still plenty of room to build something between the drive and the utility easement.

    My question is this. Does anyone have experience with Marion county? Wondering if they will allow you to split the lot into two and build another duplex or SFR on the back half? If not does Marion county allow for ADU's? The opportunity to develop the back half of the lot could potentially make a mediocre deal kinda sweet. Especially if I can split it. Then I can either sell the land, or build something on it and increase cash flow, or build and sell.

    Just kicking tires at the moment.  Not super deep into the deal.  Mostly curious about what Marion County will allow before I dive in to the specifics.  Any insight is greatly appreciated.  

     Agreed with Shawn - it's the most responsive government I've ever seen...

    1Reply
  • Peter Davis
    Member since 2018 · 14 posts · 4 votes
    6y

    Oh cool I've never heard of those pre fab ADU's! Could be a great option for you, and something I'll look into myself.

    0Reply
  • Kerry Noble JrPro Member
    Investor · Indianapolis, IN · Member since 2018 · 2k+ posts · 1k+ votes
    6y

    if youre not in a rush......then go for it.....we had to do a replat on our duplex........were selling each side individually as condos.......anything creative like that, that usually requires a hearing is SLOW........

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