Soon-to-be collage graduate considering Indianapolis

[Evan G.]

Hi all. I'm going into my final year of college and beginning to apply for full-time positions. I'm looking for a good city to invest in real estate with the savings from my job once I graduate. My current goal is to start with house hacking and move on to long-term single-family rentals. I also like the idea of BRRRR once I get more experience in real estate. When looking for locations to invest in real estate, Indianapolis shows up often for having good cash flow and projected appreciation. What can you tell me about investing in real estate in Indianapolis? Is it a good place for someone starting out in real estate interested in long-term portfolio growth? Are there area-specific obstacles or opportunities that I should consider before choosing Indianapolis?

[Kerry Noble Jr]

its a lot to go in depth on 

[Becca F.]

Evan, congratulations on you soon to be graduation and getting started on real estate investing. I think your idea of house hacking is a good one. Since you're living there you're at a huge advantage compared to OOS investors like me. I'm guessing your plan is to move to Indianapolis (unless you're already living in the area). 

I invest there (used to live in the Indy area then moved back to California). I have a SFH in Hamilton County (the house I lived in and rented out after I moved) and 2 SFHs on the East side of Indy.

Pros:

- Many ways to invest and lots of different price points: LTR, MTR, STR (I know a couple of people doing STR but STR can be challenging) and different areas to invest

- Diverse job market.  I think new hospital is being built near downtown Indy.

- Landlord friendly compared to West Coast states

- I'm heavily biased towards Hamilton County. I just flew there last month. I couldn't believe the amount of development in Carmel - new apartment complexes with rents approaching California rent (over $4000 for a 2 bedroom apartment). I like the suburbs for appreciation: Carmel, Fishers, Westfield, Noblesville. I don't know the west or south side too well but I've heard good things about Avon, Plainfield, Brownsburg, and Greenwood. They have great school districts. 

Cons:

- I think property tax rates are kind of high. Mine are 2.72% (Hamilton County) and 2.78%. I just saw a 17% increase in mine. The assessed values are lower than current market values so I have no lower comps to try to appeal them.

- Indy can be block by block. My two Class Cs are in Christian Park and Emerson Heights. AC unit was stolen right before tenant moved in (get a cage for your AC unit). 

- I didn't do a BRRRR since it was too difficult from 2000 miles away. Would talk to contractors and get a sense of renovation costs and ARVs.

[Tyler Lingle]

Here's a short synopsis on Indy investing (as a realtor with 150+ transactions & 12 doors in personal portfolio): 

- Indianapolis has all the right metrics for a stable investment: average appreciation 3-5% per year, consistent population growth, low unemployment, highest % of GDP growth last 5 years of any Midwest city. 

- Indianapolis is VERY competitive in the fixer-upper & multifamily realms. Especially on the market. You have to have the right team in place and have knowledge of the marketplace, it's not a beginner friendly market IMO. 

- All the gains in real estate come from network effect & relationships. Go to the meet ups locally, hire an investor minded realtor, talk to multiple property managers. Get a local vantage point with local relationships, otherwise you'll be one of the MANY investors that stay for awhile but sell / exit quickly because they didn't build a strong foundation...

My two cents! Happy to connect!

[Nick Giulioni]

@Tyler Lingle couldn't agree more! 

[Hunter Stoudnour]

Hey Evan,

I would check out BiggerPockets' Top 2024 Cash Flow Markets spreadsheet. I want to say Indy came in around 85th. It sounds like there are a lot of promising opportunities there. The only thing I would recommend is that you consider where you would personally have the highest quality of life along with a good real estate market. In my experience, if you find other value in the place you are living, it will give you more motivation for your investment goals.

Wishing you the best!

[Hayden Steger]

Hi Evan, 

Indianapolis is a great city for young professionals when you consider the amount of job opportunities paired with low cost of living and options for restaurants and night life. The biggest selling point for me was the people, it's home to some of the most genuinely nice people I've ever met. 

Looking at the city from an investor's perspective, @Becca F. is absolutely right, you need to make sure you're buying in the right neighborhood. If you're not familiar with the area, I would  come for a weekend and drive/walk through areas you might be interested in. I'd recommend starting with Fountain Square, Fletcher Place, Old North Side, and Lockerbie Square. 

As long as you partner with an agent, such as @Tyler Lingle, who's knowledgeable about our local market and understands what you're looking for from an investment standpoint, you'll be in good hands!