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Updated over 3 years ago on . Most recent reply

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54
Posts
28
Votes
Peter Aziz
  • Rental Property Investor
  • Valencia, CA
28
Votes |
54
Posts

OOS Investor - Just Opened Escrow on my First Indy MF

Peter Aziz
  • Rental Property Investor
  • Valencia, CA
Posted

Hey guys... Long time investor from CA (Los Angeles, all SFRs) that entered into contract on an Indy MF. The property is located off of E. Washington right across the street from Willard Park. The home is comprised of a 1+1 and a 3+1 pulling in about $1.8k/mo in gross rental revenue ($800 for the 1+1 and $1,000 for the 3+1). I have a few questions that I'm hoping the forum members can help me with:

1 - My understanding is that this is a C/D neighborhood - would you agree? Any safety concerns that should be taken into consideration? Is the surrounding area being improved and would one reasonably expect this neighborhood to perhaps upgrade itself into a B/C within the next 24 months?

2 - I've reviewed the lease agreements and it appears that the landlord is paying for all utilities. Is this common in Indy? In CA, I pay for gardening/pool service, but not for utilities. I'm considering perhaps lowering the rent a bit in exchange for the tenants taking on the responsibility for the utilities, but also understand that this may be a no-go in this area. 

3 - The rents appear reasonable to me based on my due diligence ($800 for the 1+1 and $1,000 for the 3+1) - would you agree?

4 - What would you estimate for average monthly power, gas, water, and trash (I know, this is going to be a wide range depending on # of occupants, climate sensitivity factors, etc)?

5 - If/when I have turnover, what's the timeframe to realistically expect to have each unit reoccupied in this area? 

6 - Given the neighborhood 'grade', should I be concerned about vandalism and/or theft if/when I decide to rehab the property?

I appreciate all the help and support. I'll be flying into Indy on the 12th and staying through the 14th and am happy to buy ya'll a round of beer :) 

Most Popular Reply

User Stats

121
Posts
62
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Kenny Hall
  • Property Manager
  • Indianapolis, IN
62
Votes |
121
Posts
Kenny Hall
  • Property Manager
  • Indianapolis, IN
Replied

@Peter Aziz hey!

Congrats on the new opportunity in Indy!

1. This is a C area in my opinion. Indy is very street to street and can’t be judged based on the zip code. I personally like the area you’re at - but there are area that will appreciate and stabilize faster. I wouldn’t plan on it heading to a solid B in the next 24 months. Look at areas south east of fall creek for that type of movement. Safety comes Into play primarily with targeted crime, otherwise vacant properties and appliance theft is high. I would say you’re probably good depending on your current tenant’s backgrounds.

2. Owners paying for utilities is common in lower income areas but not a best practice. If the opportunity comes to switch Into tenant’s name, go for it. Is the property separately metered? It’s understood in the prospective tenant pool in Indy they will pay for utilities.

3. Depending on the qualify finishes and overall condition of the units, this is better rent than I would have expected. However, I believe there’s about 10-15% of meat still left on the bone here for each unit.

4. Typically average $150-$200/mo in total for utilities, but request a 12 month average before close.

5. Turnover depends on the season. There’s a bit of a slow in the leasing right now, but will pick up again at the end of the year and January and then super hot again early Spring. A quality property manager will have means and marketing tools to help land a quality tenant within a week of listing.

6. When doing rehabs, typically recommend not putting appliances in until the very very end and even marketing without them. They can live in a storage unit or Lowe’s can hold them for you until a day or two before the tenant moves in. Just takes some Intentional planning. Also encourage a SimpliSafe per unit. Typically a $200 hardware investment and $25/mo monitoring fee.

Would love to connect while you’re in Indy - shoot me a message and let’s plan on it. Always happy to help!

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