All Forum Posts by: Ross Denman

We manage a few properties in the Christian Park area and I'm pretty fond of it. Also, the city is undergoing an initiative for developing the Twin Aire area (about 1 mile west) and it should have a positive impact on the Christian Park area as well. The biggest problem is that most of the homes that we manage are smaller homes and turn every year or two. Our 3 bedroom home is on their fifth lease though. They always rent quickly and we've only had 1 real problematic tenant (breeding pit bulls) but you'll find that almost anywhere within 3 miles of downtown.

I can give you some ideas. Zip codes in general are pretty broad and this one is no exception. The eastern most part of 46221 goes all the way downtown near Lucas Oil Stadium. This area may be good OK for rentals, but I would consider AirBNB. A little further west you get to the old "Valley" which is S of Rhodius Park. This is an industrial feeling area with flood zones near Eagle Creek that keep property values suppressed. It can be a pretty trashy area, but that will likely change with some of the private and public developments going on. Specifically 16Tech and Waterside. Just south of this area is the landfill, trash incinerator, and waste water treatment center. Once again, very industrial. Continuing SW from there you get to Maywood. Maywood is a C area. The rent very quickly, but most of the residents in the area are low level blue collar. Think backyard mechanics. I know that we manage a couple of homes here and we have a home that claims that they can smell the trash from the landfill on breezy days.

Further West and South of the 46221 zip code gets better. We manage several homes in the Old Mill Park area. The usually rent to pretty good tenants. We also have some west of this area closer to Camby that do very well.

Basically, it depends on the address. Make sure that you're not in a flood zone or in an area with other properties in flood zones nearby (suppresses land values,) look at the crime rate in the area, identify the nearest railroad track, recycling facility, land fill, etc and make sure that you are at least .5 miles from any of those areas and you'll probably be fine.

@Shepard Solomon the biggest collection of "blighted" areas and homes can be purchased directly from the city for less than $30,000 and vacant lots for less than $4,000. These are highly distressed homes which typically haven't been lived in for many years and haven't sold at multiple auctions. Many of them need demolished and the ones that are salvageable are in such distressed areas, it's nearly impossible to get a decent tenant. These may be areas that will work for section 8 if you can get the properties to pass the initial inspections. You can find these homes at https://public-indy.epropertyplus.com/landmgmtpub/app/base/propertySearch?

You can also find a list of many of the city initiatives and such here. http://liscindianapolis.org/where-we-work/

I'm watching Twin Aire very closely right now and keeping an eye on the near west and near northwest sides because of some upcoming developments. These can be tricky areas to invest in as they tend to bubble and the market goes soft when a ton of investors get in... this just happened in Fountain Square and Bates-Hendricks over the last couple of years. Several investors are not selling at their desired profit margins and having to rent or sell with little to no profits (or losses.) Be careful not to over rehab or commit too much money too early in these "up and coming" areas as you may not be able to recoup your investment for several years and you may not cash flow much until then if the tenant demographic is that poor.

I'm also watching the near NW side. There is an initiative (King Common) that is trying to revitalize the area around W 25th St and Martin Luther King Jr. The is the eastern edge of the Riverside/Near NW neighborhoods. Eli Lilly has just committed nearly $10 mil to be invested in building an amphitheater at Riverside Park and that's part of a 25 year roll out to revitalize that park (which is next to Marion College.) The Waterside project is quite a bit south of this area but between Waterside and 16Tech developments will have a direct impact on the Near West side and a secondary impact on the more impoverished neighborhoods of Riverside, Haughville, Near Northwest Side, and possibly Crown Hill.

When dealing in highly distressed neighborhoods though, you want to combine synergy with other investors or investment firms as rehabbing a home or two in the middle of a ghost town doesn't get you anywhere, but if 6-10 investors do renovations in clusters, they all add value together and can build on that. This may take the CDC (community development corporation) to help direct the efforts, but this tends to be a more effective strategy than just purchasing a few highly distressed homes in blighted areas and hope that someone actually wants to live there.

@Dionte Washington Since you're in Indianapolis, I would look at deals here. It's a great market with investors all over the world investing here. Ohio has a pretty similar market as well, so if you're properties are not problematic, I would keep them for now.

Depending on the size of MFH you're wanting to get in to, you could leverage the equity in those homes toward a larger MF deal. It sounds like you have about $140k in equity which means you could probably be in a $350k-$400k acquisition range. There are plenty of opportunities in that range. I would talk to some lenders about a potential commercial loan or line of credit against the portfolio. They will pay off the $70k mortgage and absorb it in to part of the loan, but you should still have $80k-$85k available as a down payment.

Indiana is a good place to start. I invest in Indianapolis,  but any college town or NW Indiana are good options as well. Laws and regulations tend to be better here than most markets. It's still affordable and can get decent enough rent rates to cash flow even with a mortgage. Most Indiana markets are growing as well with low unemployment rates. There are a lot of good markets out there, but if you're already in one... you're have an advantage over the OOS investors and there are a lot of OOS investors interested in Indiana.

@Ashley Rodgers We have over 140 clients with investments in Indianapolis and most of them are OOS investors. It's relatively inexpensive with decent rent ratios in a growing market. Deals are getting more scarce, but we still have investors buying every month. I don't know about the TX, GA, ID markets, but the tenant landlord laws are very owner oriented and property taxes are predictable. At the end of the day, I think it comes down to where you can find the right team. There are deals in many markets, but having the right team and leveraging their network and expertise is where the real money is made.

I spent several years growing up north of Chicago at the Naval Base. Many of my friends from Chicago have moved over the border to Indiana to escape the Chicago/Illinois issues. Also, Indiana has great landlord tenant laws and predictable property taxes. If I didn't already live in Indianapolis and have access to plenty of deals, I would consider investing in Hammond, Merrillville, Crown Point, or any of the smaller towns the ex-Chicago refugees are migrating too.

I would seriously look at Indianapolis. Growing city with lots of production and tech job expansion. Lots of tourism from Sports to Conventions. Lowest unemployment in the midwest. Relatively inexpensive cost of living relative to other larger markets. There are a lot of people making money in Indianapolis from developers, flippers, and buy/hold investors.

I had an investor swear that this worked... but who knows. He said to make refrigerator magnets that look like your business card and send it with your letter. The odd weight tends to get it opened first. Because it's something useful,  they might just put on their refrigerator. I know that I get wholesalers send me a ton of letters, post cards, etc and usually I just call them toss them in the trash or call to network with them. Even if it's a homeowner, their probably already getting other wholesalers DM as you're all probably working with a lot of the same lists. If you're going to do DMM you either have to hunt and source your own leads or stand out amidst the competition.

For instance, I've also seen investors who target struggling homeowners and offer JV deals directly with the owners. The sellers end up making more money and the investors have less out of pocket expense so a higher ROI on their flip. If you're using a creative strategy or have options that may benefit them (other than close quickly for more cash than the other guys) you just might pique their curiosity and get that call. Think sales. Learn to write copy. Study headlines. Understand people. It basic marketing. Many of the most successful investors I know are great marketers. Many are great negotiators as well.

This can provide you with a lot of specific data directly from the police department and 911. You can also filter out certain types of crime, locate sex offenders in the areas, etc. You should be able use the same site for any city in Indiana I think. I think that it's national, but I'm not sure how may areas participate.

https://www.crimereports.com/city/Indianapolis%2C%20IN

I usually use Trulia because it's easy, but the crimereports.com provides a lot more insight.