Is This A Good Multi Unit Deal In Indianapolis, IN 46222?

8 Replies

I am looking at buying a property in Indianapolis, IN 46222. I am an out of state investors. I know its a C area but I was told its not as bad as many other C areas and the numbers seem to make up for it.

Built in 1958 property has upgrades for the roof and furnace, is 5,009 sq feet with central air and forced air heating. 

Price:  $53,000

Mortgage: $37,500 @ 75% with a 4.6% - 4.7% rate

Closing Costs: $2,000

Rehab Costs: $6,600 (nothing major)

Total Cash Investment of $21,100

Rent $550 a side per month equating to $12,144 annually for both sides with a 8% vacancy provision.

Interest: $1,828.5

Taxes: $800

Insurance: $1,1223

Property management: $971.52

R&M and Capex @15% of Rents: $1821.60

Leasing Charges: $1,110

NOI: $4389.38

Return: 20%

Sounds like a 2 bed 1 bath on each side Duplex..? I would up your vacancy percentage... 8% works with SFR in Indy... Doubles in 46222 not so much. Of course... 46222 has a lot of different neighborhoods. so... Its hard to say with out an intersection or address.

@Gary Freidman  As @Ryan Mullin  said above, the zip code isn't very helpful, as the good/bad areas change several times within many of the zip codes. This seems like one of those deals that will look great on paper, but won't work out that way. As Ryan said, 8% vacancy is going to be too low most likely for a $550 per side duplex. If you want to PM me the address or more info I can take more of a look, but Ryan already hit it on the head above. Good luck!

I'm with the other 2. Indy is so cut up with good and bad areas that I could tell you if it could be a good deal but not without a nearest intersection. Personally, we are doing nothing at all south of 38th st. 

Take zillow with a grain of salt but that area is showing just about every property at $30k. There is even a duplex across the st and zillow says that the one you are looking at is worth $32k. I would have to drive down that street but without going down there I would imagine it's not worth more than 40 and you are still going to have headaches. You could do just fine if you get good tenants as you have a large window but it would be hard to resell as well as an exit. 

@Dale Hensley  My thinking on that was that all the comps I saw on there were 2 bed SFRs so I assumed the duplex with 2 units should be worth more.

I don't disagree that it would be worth a little more but not double. And I don't take zillow for a lot but I use it for pricing history and sales as well as a good link to tax history. If I was going to spend the 60k in a c area, I would by 3 single family. Because you can get them for $15-20k. 

@Gary Freidman  all good points above.

The only "good" thing I see about this opportunity is it was built in 1958 not 1900 like most or our duplexe's here are.

Other than that, I would highly suggest you pass [for now] and stick with solid SFH 3/1-up projects until you get a better feel of the city.

I've mentioned before, that I had several of these at one point and yes, they are VERY sexy on paper until reality hits about 3-6 months after you buy it and realize that the vacancy is very high, it's been vandalized 3 times and the tenants you did final get to move in ended up doing $5k in damage in just 6 weeks before you had to evict them [true story].

I work with a lot of investors like yourself that jump in early into a project like this that end up getting burned and it leaves our industry with a black eye.

I hope that helps.

Feel free to PM with any specific questions that I may assist you with.

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