Pre-Rehab property in Indianapolis

4 Replies

Hello all,

I appreciate if you can give me your assessment of the below deal.

An RE company is offering beside turnkey properties also (as below) pre-rehab properties. This means I buy in the distressed stage, they do the rehab (I already have a detailed list of what to do and what it should costs) and the benefit for me is a bit more RoI / cap rate.

Location: Indianapolis 46222

SFH distressed, built 1938, 3BR/1BA, 1 garage, Liveability index 72

SQF = 1106

Lot Size = 84 x 112

Price = 36.500USD

Rehab costs = 24.235

Closing costs = 1.500

Total price = 62.235

Rent per month = 725

Expenses per month in USD
Taxes = 54
Insurance = 40
Prop Mgmt = 75
Ongoing Maint 5%= 36
Vacancy Loss at 5% = 36
TOTAL EXPENSES: 239

Per my calculation 9.6% CapRate.

I would pay all in cash as I am from Europe and financing for an foreigner is too expensive and does not make sense in my view.

What do you think about this deal? Thanks in advance.

A lot depends on the location of this house bud.  I myself would pass on it.  For that kind of money you should be able to get a dam nice property in a good location.  Your rent to purchase price seems low for that area.

@Andreas F.  congratulations on looking at one of the best rental markets on the planet!

The price seems about right [for a turn key provider].  

IMO - the age of the home is a concern to me [older homes need more on going maintenance - I know this first hand] and the areas is just "okay".

West of the Race Track is much better and somewhat newer built homes [post 1945].

I'd be glad to have a conversation with you to provide some additional information about our market.  Please let me know.

Originally posted by @Jerry W.:

A lot depends on the location of this house bud.  I myself would pass on it.  For that kind of money you should be able to get a dam nice property in a good location.  Your rent to purchase price seems low for that area.

 Hello Jerry,

thanks for the feedback. I just started to look into Indi as a city. What locations would your recommend?

For 60K you should be able to get a 1970-ish home with rent range from $800-950 per month in Indy.

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