All Forum Posts by: Ryan Mullin

 Not any more.  Fountain Square and Bates Hendricks are pretty much tapped out as far as buy and holds go.  Its extremely tough to get an 8 or 9 cap these days. There are areas near fountain square that will get above 10% but you have to know where to look... and yeah there are rough pockets.. 

As an out of state investor right now I would not focus on trying to be near fountain square, its too narrow of a search.   2 Years ago I was saying the opposite. I encouraged a lot of people to buy in FS and BH and surrounding areas.  And now prices have pretty much doubled.  Both on the acquisition side and the retail sale side.  Not because of the influx of out of state buyers or any thing like that..   but more so the community at large here on the south east side of Indy over the course of 20 or 30 years + the economy is good and people are loaning, investing, building and rehabbing.   

There are more opportunities out there!  Dont worry.  :)   Tons of good Indy neighborhood threads on here.  

Unfortunately, FS Houses doesn't have any inventory at the moment  :(    However, I have given your info to @Jennifer Roberts who will reach out to you (if she already hasn't.)    We always have a good pipeline of properties so inventory status can change any day.  

Thanks for thinking of us!   Come see us in Indy too... 

-Ryan  

Hey @Sarah Donatelli !

We can definitely meet up when you get in town...   Yes, Fountain Square is off the hook right now.  There are still opportunities but they are few and far between.  In general there is a TON of opportunity but it is officially a sellers market and you really have to fight to get deals...   

But, yeah lets meet up and discuss goals and how we can help one another!  

-Ryan

Hey Mario,

Have you thought about where you will hang your license?   I'd be interested to know what your goals are. 

I think what @Brent Coombs is saying about local knowledge is the most crucial aspect of this thread. 

My wife and I have several 30k properties that have performed like clock work for many years.  And, yes...  we have sold turnkey in that price range that perform too...   but on the other hand we have seen hundreds of 30k properties sold to out of towners that go bad right from the get go.  

The difference is knowing the areas.  AND...  good management. 

In Indy at least there are working class 30k areas and GHETTO 30k areas.  And looks can be deceiving.   Thats why so many out of state folks get stuck with ghetto crap.  It looks like a nice 3 bedroom ranch built in the 50's or 60's...   which is true.  But only ghetto tenants will live there!  

The 30k properties that we hold have no problem getting good tenants. some even with 700 credit scores.  They need to be within close proximity to highly desirable areas.  A lot of the times they need something a bit extra...  like a privacy fence, a garage or central air.  Making them stand out from the rest.  

One thing that I will say that not many people say on BP.   Sometimes its not the tenant or the property managers fault.  Sometimes its the investors fault!  Yes...  sometimes out of state, rookie investors that want to "drive the bus" end up making mistakes (Imagine that right..).  Some of the most common ones are trying to push rent to high and trying to cut costs on repairs.  A lot of times that is the reason why the property manager will end up feeling like they need to roll the dice on a not so great applicant.  and we all know how the story ends.  

I think overall in the whole "out of state investing" industry the major problem is the mindset.  Its the mindset that cash flow is everything.  Cash flow is not everything.  Equity is the single most important aspect of investing period.  IMO of course.   The reason why the Cali investor comes to the midwest is...   Cash flow.  And when I hear people saying that all thats important to them is cash flow I cringe.  Just because you came to the midwest for the cashflow doesn't mean that you should ignore all other aspects of investing.  You wouldnt buy a house in the ghetto in Cali, why would you go all the way to the midwest to invest in the hood?  Cause its cheaper and in way less demand?  Nonsense.  

The difference in buying in a select area of working class rentals in close proximity to something more desirable AND the ghetto is everything.  A lot of TK providers will simply go to auction and pick  up whatever is super cheap, rehab it and kick it out the door with whatever rental rate makes it look like a good deal...   

At the end of the day its on the investor to understand all of this and navigate "out of state" investing.   I don't think PM's are out the get the investors it just gets lined up that way because of all the market forces at work...   Its way harder to manage ghetto over priced over rented properties than ones that perform.  Im sure most PMs would rather manage the later.  

Just my 2 cents.   Good thread.  

I'm glad you made this thread.  I actually started a thread like this a while back and it didn't get a single response.   What we have been trying lately is this...  (we are a brokerage in Indianapolis that provides turnkey props here and there).  

Get the property rented to tenants that want to move in in like 2 -4 weeks.  That 2 weeks to a month is when we try our hardest to get it sold, inspected, appraised etc.  Which is difficult to say the least. If we can get that done its the best case scenario.  

Worst case scenario is this:  Rent the property to excellent tenants, bother the tenants with an investor showing, then get it under contract to be sold...   then the buyer gets an inspection.  The inspector goes through the house nit-picking it.  The inspector talks with the tenant.  The tenant is informed of every single flaw with the house (at this point the tenants are questioning why the house was rented prior to the inspection, why all of these repairs need to be made, why is the house for sale when they just rented it, etc.).   

Now, we have to send our contractor in to get an estimate on repair items.  We get the bid, we agree with the investor buyer on what items will be repaired...  now we have a deal with the investor buyer.  Now the repairs get made.  Now we send out an appraisor.  Now the inspector comes back in to do the re-inspect.  At this point the tenants have been "put out" 4 or 5 times with people coming in and out of the house.  All this right at the start of the lease.  Tenants are not happy with this at all.   And...  at this point if the investor backs out...  and we have to re-sell it...   its virtually impossible to get the property sold, and keep the tenants happy.  

For our company we operate in the same few areas of Indy and the tenants talk.  We recently had to switch up our model to avoid ticking off tenants.  

There is no easy answer for this question.  Showing the property is just the start...   

I didn't see an address...?   Did I miss it?   

We use @Derek Lacy and have been for many years.   

Little flower is a great neighborhood with a good mix of home owners and rentals.  The west end (closer to sherman) is a much higher concentration of rentals.  The east end is where more homeowners live and the values adjust accordingly.  Shannon and Linwood are kind of the boundary in my opinion.  On linwood and the blocks east of it you will see 2 bedrooms selling for 100 - 120k.  

This deal sits on Grant which is 4 or 5 blocks west of the high comps.  In my experience this is a great area for buy and hold rental properties. I believe one day the high comps will eventually creep over into the west end of little flower...  but..   Regardless if that happens or not the cashflow is excellent.  

There is definitely more than one way to skin a cat.  This whole industry boils down to integrity.  Thats why ethics is such a hot topic when you go through RE classes and continuing ed.  

Sorry @Mayank S. didn't mean to take the thread over.  I will just make a couple more posts and then I will be done :)