Knox, IN Investments

5 Replies | Hammond, Indiana

Hello all,

This is a question pertaining to investing in Northwest Indiana (NWI). I was just inquiring as to whether anyone has any investment properties in Starke County, Indiana; specifically Knox, IN.  I know there is a limited economic drive for the area, and was wondering if there were any success stories of people maintaining a successful buy and hold portfolio in the area.  I recently bought properties in the area and am wondering if I should try to sell them or keep them as rentals.  I purchased four units for a little under $80,000 total.  I'm looking at $500 a month for each unit, $2000 gross monthly income, $24,000 annual.  Expenses are roughly $3000 annually.

If anyone has experience in the area, any insight would be great.  I'm not sure if my rent expectations are too high or not.  The units are all 2 bedrooms 1 bath units with roughly 700 sq ft.

Thanks in advance!

Originally posted by @Jorge Barboza Jr. :

@Jordan Falls those look like great returns. How long have you been getting those rents? 

 I just got the properties.  I do not have tenants yet, but previous owner has documented data (cancelled checks, rent receipt copies and lease agreements) showing they consistently received rents of $450-500 per unit over the last 12 months that the units were rented.  Previous investor passed away and the estate dumped the properties for quick cash.

I'm looking for someone who is invested in the area, to see if these are reasonable rents.  The properties were sold as is/where and the investor who originally owned the properties had passed and kids did not have knowledge of any of the income produced by the properties.  If the rents are what the previous documentation shows, I plan to hold on to them, if not, I'd like to put them on the market.

The numbers look great on paper, but as I mentioned, I am unfamiliar with the area, so I'm looking for insight from someone else who may have properties in the area.

I forgot to update my findings so here we go:

Cash flow of the properties was surprisingly correct.  They would have grossed $2000 per month while fully rented.  Rents were just right.  I ended up dumping the properties; however, because learned from a local that the specific neighborhood the units were located in was heavily infested with drug activity, mainly meth and heroin.

An investor from the area purchased them with full knowledge of the situation.  It didn't seem to bother them as much as it did me.  Unfortunately with this deal, there was a "catch."  The buyer was more concerned with the great numbers than the "possible" illegal activities that are prone to the area.

Cash deals on both ends.  Looking to close next week.  In the end, I broke even.  Profit was offset by closing/holding costs.