Indianapolis Flippers - Current Market Conditions ???

[Aaron Cullen]

Hello fellow flippers in Indianapolis! 

Curious what other flippers are experiencing in the current market in Indianapolis. I have one flip approaching 45 DOM and another at 10 DOM with no offers yet and not a lot of foot traffic. I've checked all of the normal boxes to get interest like great staging, open houses, and nice finishes. My flips are in the 200-300k range.

I know it traditionally slows in the fall to winter cycle but hoping to get input from the experienced flippers if this time around seems slower/different? Also any ideas to get offers in the winter cycle? I've only been flipping in Indy for 2 years so I haven't experienced this part of the seasonal cycle yet. All of my flips so far have come on market in the spring/summer.

Thanks!

[Ross Denman]

It seems that the near southside markets like Fountain Square and Bates-Hendricks have slowed a little. Obviously, we are in the slowest season of the year, but I think that the market is stabilizing and/or correcting to more reasonable price range. I've been advising my clients against buying rentals in those areas fora year as the acquisition costs seemed to get unreasonably high for the amount of work that needed to go in.

I also spoke to a builder about those hot areas the other day and there is yet another split in those marketplaces. You have some distressed homes, you have livable homes with low-trim level, you have highly renovated properties with high-trim level, and now you have new construction homes with high-trim levels. The new construction homes are selling in the $350k+ range and many investors are trying to get similar results from high-end remodels, but I think that the new construction market may be more desirable than the rehab market.

I am seeing similar traction on the near East Side right now as we saw in Fountain Square 4-5 years ago. We just rented a home in St Claire Pl in 24 hours at $1,200/mo. It's the second one that I've seen recently and their have been a few home sales in the $180+k range. You can still find homes in these areas for less than $50k, but most of the high-end remodels are ranging for $80k-$150k remodels. I am expecting to see retail sales in St Claire and Brookside Park cross upwards of $200k this year. Crime is still tough, but IMPD is over-policing the area to settle some of the neighborhood activities down. We won't see real change for another 1-2 years, but there are many active investors in these areas. @Ryan Mullin is one of the most knowledgeable real estate professionals in these areas as well and has several projects working there.

Your time of year will impact things a little, but in general, if there are not inquiries, it's probably priced too high. I wouldn't get over aggressive with price reductions before Spring unless you're getting killed in holding costs. They may very likely hit your target pricing by March or April.

Did you go in to this with any secondary exit strategies? Maybe refinance and rent? Owner financed retail sale? Owner financed investor sale? Turn-key sale? Lease w/ Option to buy? I always advise any clients to be sure that they have multiple exit opportunities in case the market changes. You may consider finding a STR management company (which we don't do) to at least generate some income until Spring.