All Forum Posts by: Ross Denman

We've gone through these things a few times. I just had a "squatter" trespassed from one of our vacant properties a couple of weeks ago. First off, Indiana has no squatters rights. Squatters are handled from a common-law perspective. If a person squats long enough to claim adverse possession there could be a problem, but that person would have to reside in and care for the home for 10 years and pay the taxes on the property during that time. This is not the case here.

We had almost an exact thing happen 3 years ago when one of our clients purchased a foreclosed home and the previous homeowner was still residing in the home. It was pretty straight forward... we offered cash for keys and gave him a 10-day notice. He tried to give us the run around, but we didn't give him too many options. As soon as we filed eviction, he came back asking for the cash. We refused as we had already paid the court fees, etc. He was out in just a few weeks after that.

Point of the matter, Indiana is a landlord friendly state as long as you are being fair (don't intimidate or bully the resident) and following the correct steps. We can usually get a tenant out in about 3 weeks after filing eviction. 7-10 days for the tenant to be notified of the court date and 7-10 days to leave the property after the court date.

Like @Michael Wagner mentioned, you will want to keep a close eye on changing regulations and buy a property with a potential secondary exit strategy (retail flip, long-term rental, etc.) In Carmel, IN (northside suburb of Indianapolis) the local government has already sent notices to all vacation rental owners in town to cease or be subjected to a fine. I believe that they are going to insist some form of zone variance permit and mandate specific types of insurance. Several towns are getting pressure from HOA's and the hotel industry. We've already seen some cities create extra taxes for Uber to protect the established market place. I am afraid that we will see this more and more.

We manage around 20 homes in the area between 38th St and 42nd St. Personally, I wouldn't go south of 38th St (Crown Hill area) as it continues to degrade until you get closer to the city. I think we had two evictions in those homes in the last year and that's the only major problem we've had. It is possible to find decent tenants, but many of them may be slow pays from time to time. 

The Ten Point Coalition is very active in this community and they are claimed to be the ones who have had a major impact on the murder rate here.

All of the historic districts in Indianapolis are rapidly changing as the quickly growing tech sector is drawing young professionals to Indianapolis. Companies like Salesforce, Determine, Pondurance, Kronos, Appirio, Angie's List, Torchlite, etc employ thousands of young professionals who love to rent in the revitalized historic districts. Butler-Tarkington is likely going to continue to be an area that will be getting their attention.

I am a huge fan of a short-term hold strategy in the Indianapolis historic districts. I have investors who have seen around $100k+ in appreciation over 5-7 years in Fountain Square, Irvington, and Broad Ripple. I believe that this area holds the same type of opportunity.

@Scott Steffek normally I would tend to agree with @Jay Hinrichs because I saw the prices that the hedge funds and REIT's were paying for the properties even when purchasing the notes and foreclosing on the properties. They were driving the prices up to where the real estate investors were looking elsewhere for properties. We have had a strong selling season this year and have seen quite a bit of appreciation this year in Indianapolis. With some of the large tech companies coming to Indianapolis this year and the strong job market growth, I anticipate continued appreciation as long as the economy doesn't tank as soon as the elections over.

Normally, Indianapolis has not been a place of major appreciation but a has a very stable economy and a fairly low cost of living. It's made it a great place for long-term buy and hold opportunities. Personally, I never see turn-keys at 55%, but I do have several clients who have purchased and rehabbed properties with 50-60% all-in to the property.

Lastly, I manage properties for a couple of different hedge funds and if they sold all of their properties at 55% of fair market value, they would break even at best. They do have some great homes that they purchased for dirt cheap and they also have a lot of money pits. That's what happens when you purchase several million dollars of NPN's at a discount. When you are purchasing a few at a time... due diligence is everything. It's extremely important to have boots on the ground in a city like Indianapolis as the neighborhoods change in as little as 2 blocks in some areas. It is vital to build a team with an expertise in the marketplace.

@Tiffany Campbell I haven't seen too many oil units in Indianapolis but I have occasionally run across them in the semi-rural areas on the outskirts of the city. The typical furnace in Indianapolis is going to be Gas or Electric. A lot of tenants like All-Electric units but Gas tends to be more efficient for larger units.

@Ehab Tadrous, you can find $30k deals in Indianapolis, but I usually recommend our investors to stay away from them. You aren't typically going to find any retail flips that you can purchase and rehab for $30k so almost everything that you'll find in that range is going to be junk rentals in higher risk neighborhoods. While the initial ROI may look good on paper (and the wholesaler trying to sell it to you will make sure that you see that) there are a lot of extra costs that come with owning these types of properties... less stable or capable tenants, longer vacancies, more maintenance, higher reconditioning costs, more likely to have evictions, etc. I usually recommend for investors to have at least $50k-60k to consider investing. With that being said, you can likely handle a $100k project with $30k skin in the game if you build a relationship with some money lenders. You can certainly take advantage of real estate investing with $30k, I just wouldn't recommend looking for $30k projects. The profit margins are going to be too low and it takes very few mistakes or poor assumptions to find yourself over budget and not being able to make a profit at all. I have actually scored a few good wholesale deals from new investors who were underestimated the scope of the project.

As far as finding someone locally, I would recommend finding a property manager that you like if you are looking for rental properties and an investor/project manager if you are looking for rehabs. Truth is, you have to build an entire power team and it will usually consist of several components from Realtors to Attorneys.

If you do come to Indianapolis, let me know as I would love to sit down and chat with you.

Welcome @Joe Schriever. It's great to have someone new from Indiana to network with. 

Congratulations @Jay Grabbe and best of luck to you. If you are interested in the Indianapolis area let me know as I have a variety of opportunities hit my desk each month.

Welcome @Jeff Richardson. Great to hear another person who is experiencing success.

I love these stories. So many investors underestimate rehab costs and holding costs. Being remote, it's important to have local boots on the ground to ensure that your contractors are showing up, working according to the correct time frame, and doing quality work. I am a firm believer in team building when doing remote investments. While $7000 is a costly education, it looks like you learned quickly. Congratulations!