Indianapolis: Starting Out

[Nathaniel Jones]

Currently saving up capital to a goal of $50K + to begin investing in either multi-family duplexes or smaller commercial properties with commercial tenants.

It appears that the Indianapolis duplex market is very overpriced unless you buy a unit in the part of Indy where the crime rates are through the roof. I feel that the commercial sector isn’t as over priced.

I am in help of direction. Should I focus more on commercial or residential markets? Should I over pay for a multi-family with good cash flow? Should I wait for the market to begin to settle?

Thanks in advance. Trying to find direction.

[Greg Scully]

@Nathaniel Jones - Having done both, I prefer commercial over residential.  The flexibility, scale and tax benefits are more favorable in the commercial space.

Over paying is a subjective term.  Insurance companies can purchase at 4 cap and still reach there investment goals, meanwhile individual investors might consider that over paying relative to their goals.  You only over pay when you make exception to your parameters for a deal.  Be disciplined.

I'm not waiting for the market to settle.  There are still deals being made all the time, it's just more difficult to find them.  In a downturn there will be different challenges in making good investments (availability of credit, vacancy issues,) there is no right time, just right deals.