Investing out of state in Milwaukee and Indianapolis, looking for local contacts.

[Account Closed]

Hello everyone,

My name is Anup Patel and I am Real Estate Investor based in California looking to invest out of state. I have some experience investing California. I looking for buy and hold properties as well as flips as well. After doing some market research and looking at demographics investing in Milwaukee and Indianapolis looks like a great place to invest.

I am planning to make a trip to Milwaukee and Indianapolis in March/April 2015, to look and scout both of these areas in person. I am hoping to network with real estate agents or property mangers who can find me single family homes below 25K-30K that require up to 5k in repairs  or duplex or triplexes that average about 25k a door. I would be purchasing these properties all cash if possible.

Please reply if you know anyone willing to work with out of state investors in either of these areas or just if you like to network via the biggerpockets community. Hopefully after getting some contacts I can finalize a trip and get to meet some if you as well. Thanks for help and Happy holidays.

Anup

[Ben G.]

Originally posted by @Mike D'Arrigo:

@Account Closed is right. At those prices you will be in very rough areas of the city. They might look good on paper, but I can assure you that they will most likely be nightmares. I know the Indianapolis market and I know that anything all in for $30-$35K is in a ware zone. In my opinion, properties in that range are not going to be good long term buy and holds. Feel free to contact me if you want more insight.

 Mike D'Arrigo,

You say, "anything all in for $30-$35k is in a war zone."

Danny Johnson a successful BP member and real estate investor, in his blog article, defines a warzone as areas where gangs, prostitutes, drug dealers, etc. are out of control (or in control – however you want to look at it).

Respectfully, I think you are making a sweeping generalization saying anything in Indianapolis all in for less than $35k is in a war zone.  I am confident that many of the professional Indianapolis investors who are on the ground and local here would agree with me. 

I closed on 737 Temperance Ave, a 3/1 house in the Christian Park neighborhood just last Friday.  The all in amount on that house to have it turnkey and renting at $750 is less than $35,000.  This includes new water heater, new furnace, new AC, and updated paint, appliances and flooring, and updating the electric service. It also has a really nice 2 car garage. 

I'm not sure how familiar you are with Christian Park, but I would have no hesitation taking my young son to the park to play in that neighborhood.  I certainly wouldn't classify this as a war zone. I would have had no problems living in that house myself, but I already own a home.

I sold a 3 bedroom brick ranch house, with a garage, and a full basement, on Pasadena Ave to Shawn Holsapple late last year in Lawrence Township that rents for $750.  This house was in a neighborhood full of post war built brick ranches and two story homes with full basements.  At the very least, 50% of the homes were owner occupied.  Owner occupants do not inhabit war zones.  The all in amount for this house was less than $35,000.

A few years ago I sold a house at 1610 Ringgold Ave to Ryan and Ashley Mullin in Bates-Hendricks neighborhood where the all-in amount was less than $35,000.  Bates-Hendricks is certainly not a war-zone and there are houses in that neighborhood that are now comping for $150k - $200k

One could argue that it's unfair for you to make sweeping generalizations such as the one above. There are many professional investors in Indianapolis who have different business models than yours, and these professional investors meet the needs of many out of state investors by selling them cash flowing properties for under $35,000. Many of these houses are in gentrifying neighborhoods where the prospect of higher than average appreciation balances the risk.

When you repeatedly make statements like the one above, you are making statements that are not based on fact, one may argue, that in essence, you are using a form of propaganda to promote or publicize how superior your business model is compared to the other Indianapolis turnkey operators or wholesalers. 

Your website, podcast, and forum posts are chalk full of great content, and you are a wealth of free information.  Therefore, it's also dangerous for you to make statements like these because you have a lot of influence on the community of out of state investors.  Many of these investors trust you, and rightfully so.  However, when statements like these are made you could be preventing an investor from taking justifiable risks and investing in gentrifying neighborhoods of Indianapolis.

I'm confident there are many successful Indianapolis investors in the BP community who can give examples of properties they bought all-in for less than $35,000 that meet their investment goals. I'm also confident that these properties aren't in war-zones.

One could also argue that you are trying to sway investors from doing business with turnkey companies or wholesalers in Indianapolis who sell more affordable properties than the properties you sell.  

Every out of state investor has different investment goals, and different levels of risk tolerance.  It's not your job to tell these out of state investors that it's wrong for them to buy houses for $35k because anything like that is in a war zone.  

The same goes for me. It's not my job to tell these out of state investors that they'd be crazy to buy one house for $120k, when they can buy 3 houses all in for $40k.

It is every wholesaler's and turnkey operators job to identify the investor's goals, identify their tolerance for risk, and steer them in the right direction even if that means they aren't buying a house from us because we don't carry the inventory.

I'm confident that many Indianapolis investors in the BP community can give examples of properties they bought from you for $100k+ that they are doing extremely well on.  

I wish you the best, and I'll continue to refer out of state investors to you when I can't meet their needs!