Not yet thriving neighborhood should I invest there? Indy area

[Denise Peterson]

I am looking into my first flip.  Downtown Indianapolis is a growing market, however, there are still pockets of rough spots.  Most of the investments are popping up in these sections.  I am being told to stay away from these pockets even though the comps are decent because literally you can go a block and be in a different demographic of homes buyers.   You can see an abandoned house and then one block north could see a million dollar home.  Should I risk jumping into these areas?

[Richard Bonisa]

@Denise Peterson I'd be extremely careful and look for a proven area.  Keep in mind there is a cottage industry built around selling to out of state investors.  Quite a few times, the investor doesn't get what they are looking for.  You might be likely to get comps that totally benefit the seller and aren't what you really want to know.  

I do like what @Jason Tressler has to say.  I would also be cautious of some of the larger brand names in the Indianapolis market.  In my opinion, some of the first people to respond or "sell" may not have your best interests in mind.  Most of them have a great pitch. 

My recommendation is to talk to several local brokers and compile your own synopsis of these areas.  I would steer clear of the brand names (now, that's just my view of it).  A lot of these wholeslers will get something under contract or purchase a property and get you wrapped up into a rehab that doesn't work for you.  I've seen a lot of bad numbers, bad contractors, and some very large estimate changes.  Believe me, I've seen it.  I've seen some people get burned badly. 

I would find a local broker that is focused on the END sale FIRST.  Be very careful of some of the one stop shops, especially if you are an out of state investor or don't live in Indy.  Currently,  I am a local broker but I'm not taking anything new on these days, so I don't have not agenda and nothing to sell. 

I do have a few wholesalers that I think are legit and have a few that I think are "not so great".  

Should you risk jumping into some of these aeas - My answer is NO.  I my opinion, it is very risky.  I've seen a lot of rehabs that didn't go well and had some question as to how funds were spent, bad numbers from the beginning, and contractors running off with funds.  

Irregardless, I would refer you to a few blog posts that may be helpful.  

https://www.biggerpockets.com/member-blogs/12615/88171-due-diligence-is-the-key-what-can-you-do

https://www.biggerpockets.com/member-blogs/12615/88227-the-truth-about-indianapolis

If you have any questions, I'd be happy to share my expriences in Indianapolis and with some of the local players.  

I wish you the very best in your investment and rehab in Indianapolis!!  

-Ritch