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Out of state BRRRR in Indianapolis
Good afternoon everyone,
I currently live in Rhode Island and just own one 2 family here. The market prices here now are insane and with the interest rates almost unaffordable, so I started looking out of state and my research led me to Indy. I took out a HELOC on this residence for 140K and am looking to use that to maybe buy something I can fix up (not a full rehab) and rent out for some decent cash flow. I wouldn't want to keep the balance on the HELOC for too long which is why I would like to do this strategy to pay it off What attracted me to Indy was the diversity, employment, population growth and is a pretty big metro. Am I in over my head trying to invest this far from me? I never been to Indy but would definitely be visiting first and would not buy sight unseen either. I like multi families but I read they are in the rougher parts of Indy. So I wouldn't mind investing in SFR that make sense to what I'm looking for. I'm trying to build a portfolio and Indy seemed like a great place to start with what I have. Any insight anyone has is greatly appreciated.
Thank you!
Dont let the long distance scare you away, as long as you have a great team in place (realtor, PM, contractor, etc) then they will be able to take care of 99% of the issues that may come up. I chose a market almost 1,000 miles away to invest in and I havent looked back since. I also have a similar strategy to you, live in a high cost of living area and using a HELOC on primary to build a portfolio. I dont know much about Indy but a good PM will keep you from buying in bad areas and if you find a good deal you should be able to get 100% of your cash back to rinse and repeat within 6 months.
Anthony, my husband and I closed last week on our first long distance BRRRR. Prior to it our experience was with local rentals that we managed ourselves bought the "traditional method".
The two things that I think are the most important:
1. Read both books from David Greene of Long Distance REI and BRRRR. David teaches his "systems" which will increase your chance of success.
2. Find a really good, ideally investor friendly real estate agent. A good real estate agent will be able help you select the right properties, and should also be able to provide you with some referrals.
I hope this helps!
I can definitely assist with Indy if you need more background and info
Anthony, I think out of state investing can be a very powerful tool especially when investing in your local market is not really an option. Indianapolis is a great market for what you want to do and you were spot on when you mentioned it being an area with population growth and great employment options. I'd love to share more about what it is like to invest in Indy and connect you with some of my team.
@Anthony Britto Indy is a great market especially for BRRRR and cash flow. We get a ton of hard money and DSCR loan inquires from out of state investors there. I personally live in SoCal but invest in Missouri where the numbers make more sense for me and I have boots on the ground. You should absolutely look into Indiana but you need to build a team you can trust which can take time (and some trial and error).
Property Manager (don't try to self manage remote)
GC (maybe the hardest to figure out)
Realtor (find someone that speaks investor and ideally owns their own properties)
I'd recommend starting with providers here on Bigger Pockets with bona fide reviews from other investors. There are plenty of great property managers in Indy which function as one-stop-shops (realtor, pm, w/ subs/GC contacts in house).
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Lender
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My advice to Out of State BRRRR-ers is to evaluate firstly if turnkey, in the line of development is not a better use of your time and resources. Secondly, take multiple trips out to our market. Thirdly, make long term relationships based on relationship equity versus quick transactional relationships. It takes a lot of TRUST to win out of state and BRRRR. Speaking from experience helping many out of state investors navigate this process...
Thank you for all your insight and advice. Definitely taking this all into account, I don’t want to rush, and my market is insane right now. But I do see I have to do more due diligence than I thought.
Quote from @Tyler Lingle:
My advice to Out of State BRRRR-ers is to evaluate firstly if turnkey, in the line of development is not a better use of your time and resources. Secondly, take multiple trips out to our market. Thirdly, make long term relationships based on relationship equity versus quick transactional relationships. It takes a lot of TRUST to win out of state and BRRRR. Speaking from experience helping many out of state investors navigate this process...
I did read turnkey would be less of a headache. The only thing is I don’t have cash, just a Heloc so with turnkey I’m not sure how I can get an exit strategy out of that Heloc.
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I'm an investor in the San Francisco Bay Area (2 properties). The very high prices and interest rates have make it very challenging to buy here now so I'm buying out of state. I think the Midwest is a great place to invest.
I have 2 SFHs in the Indianapolis metro area, one that I bought 10 years ago in a sought after suburb (it was my primary residence before I moved to California). The other one was a recent purchase. I bought a turn key SFH and the tenant is moving in very soon. @Gloria N Gear represented me in that transaction and has a great team. I'm looking at doing a BRRRR or possible fix and flip for my next purchase.
Feel free to hit me up if you need any help! Did long distance here in Indy for a long time before moving out here. Can tell you who the best couple people out here to work with are!
Great post Anthony!
Thank you for identifying the things that brought you to looking at Indy for investment from the out of state perspective.
With the few months that I have been working in investment real estate here in Indy I have gathered that you can be right about the duplexes. There are some in rougher parts of town but there are plenty more options in other areas. They may stretch you $140k but there are opportunities here and there closer to Rural Street. SFH on the other hand will have more opportunities for you. There are plenty of homes in Indy below that price point to allow for $20h-$35k in work.