Indianapolis....what's going on?

Question

Can anyone expound on what's going on in Indianapolis and if this is a good place to look at buying property. There seems to be a little buzz around this place as there are a lot of postings on here touting the place as having many "cash cows". The prices are probably in line with many large midwest cities, which are very reasonable compared to my Washington St. What are the taxes like? So what's the economic/business situation, new development, education looking like? Anyone familiar with Indy want to share info on if this could be a place to seek investment?

Todd Mims · Answer

Rich, I know most of Texas is good for investing, but why do you think you are maintaining 100% occupancy? What are some contributing factors to that area

Marc Freislinger · Answer

I wish it were so easy! Take 46236 for example, my old zip code. A quick realtor.com search turns up 280 homes from $2.3 million to $44,000. This city has great and terrible streets just blocks apart. 
          
          46201 is mostly high crime, so is 46218 and 46205. But these areas are all rentals, and cash flow is king right?
          
          We are getting more gang activity, but it's still mostly "wannabes," who only kill each other. There are no places in Indianapolis that I'm afraid to go to during the day, and only a handful that I won't go to at night. We already manage properties in some of the worst neighborhood and keep them occupied well.
          
          Send me a PM if you'd like to know how we can help you invest in this area.

Rich Weese · Answer

Todd- There are quite a few reasons that The Mcallen area is at the top of list. For 3 straight years, Money mag had selected Mcallen as # 1 in nation for future appreciation. Median price of homes is low compared to rental rates. There were 2 companies that built HUNDREDS of low priced all brick homes in the last 7 years. Many of these are  now resales, reos or short sales.
    The area has just been selected # 2 for job growth for the next 12 months. There are approximately 1 million residents in the Rio Grande Valley. The Wild Card is there is a city just across the border(Reynosa) of an additional million people. This is also the city where many of U.S. plants have moved. A lot of the Reynosa  Many execs and high up Plant workers live on the U.S. side.
    The weather has also been discovered by winter texans. 700,000 strong. Mcallen is actually further south and sunnier than Miami, FL. Most people don't realize that. Lots of positive factors in that area, imo. 
    However, Most areas of TX are strong. I own a 40 year old 154 unit in Dallas area. It is currently 97% occupied. Texas is still very good. Rich

Rich Weese · Answer

I have around 40 sfrs in rio grande valley, tx. 100% full. The manager tells me he has zero vacancies in ALL the properties he currently manages. Any other area match that %?? Rich

Marc Freislinger · Answer

I'm at 90%.. and my only vacancies are units that owners won't pay to make-ready until they're leased.

Todd Mims · Answer

Yes, cash flow is king until your PM get's jumped.

Really, does this really happen?...I grew up in Detroit (need I say more) and I didn't really know of this happening. I haven't lived there in a while or maybe I'm even out of touch, but is this something you guys really think keeps people or you guys from making money being worried about someone being jumped in a bad neighborhood? I learned from travelling the world, which applies in neighborhoods around the world, no matter where you go, don't look like you have too much money, blend in and don't be flashy and flamboyant in those areas. Pulling up in your new shiny S600 benz does not help your situation, don't want to get to far off track, but thats my opinion.

Steve Smithy · Answer

I mean that they are completely renovated buildings with tenants and property management setup already.  Yes they are profitable, they easily meet my 2% rule (my first building is 3% with a new roof and everything.  Some areas of Terre Haute are run down, but my strategy is student rentals so they rent again easily.

Marc Freislinger · Answer

Steve, what is meant by "he has many other deals that I think for an out-of-state investor are good?"

I don't know the Terre Haute area well, other than driving through it to my rentals in Vincennes, but I'd be interested if they are profitable.

Steve Smithy · Answer

I invest in Terre Haute, right near the university.  My vacancy rate has been higher than expected, but overall I've got a good deal.  I have 2 properties that I bought from a local flipper of multi-units, he has many other deals that I think for an out-of-state investor are good, he rents them and everything before he sells them to you so you don't have to do anything.

Marc Freislinger · Answer

I agree that converted duplexes often have weird set ups. All of the properties that we currently deal with were built to be duplexes. They are older properties though. We look for nice streets in bad neighborhoods. 
          
          The reason I look for multi's is because of the vacancy rates. If half a duplex is vacant, I'm still making money. If a house is vacant, your losing money until it rents. I see that stress cause people to make bad decisions. 
          
          We do our own property management, and manage for out-of-town investors. So far we've never had a problem, but unlike some PMs, we don't carry cash. If my partner or I are ever robbed, they're more likely to get lead than paper. 
          
          I missed a call from an 808 number a little bit ago, if that was you Tom, feel free to try again. :)

Indianapolis....what's going on?

Most Popular Reply