Wholesaler · San Diego, CA · Member since 2015 · 48 posts · 12 votes
I've been following threads on investing in the Midwest on BP. I saw a few threads on the NW Indiana region. A few areas recommended included Hammond and Merrillville. After a bit more research, Hammond turns out to a a high crime region - so I'm assuming C or D class. And got feedback from another investor that Merrillville can get very rural quickly which may make finding renters a challenge. Red flags.
Any feedback for areas that are strong rental markets?
I'm looking to buy and hold with low $45-60k entry with a 12-15% return, Class B neighborhoods in a landlord tax friendly state / area. Does it exist?
It can be very easy to get caught up in numbers without knowing an area. I have been working in Northwest Indiana since 1998 so I know it well. Every time I read people's comments about how it is the mythical place that has low crime, low property prices and high rents I have to shake my head.
I choose to invest in the area because the below average schools and above average crime rates do not deter me. There are all types of people that need to live in all types of areas. Real estate investing is no different than anything else. The risk and the reward are hopelessly intertwined. Typically if someone professes that an area offers high rents and low aquisition costs, there is a reason. I choose to accept the risks inherent with the reward of investing in C areas.
If you are looking for a B class area with $45-60k aquisition costs I'm afraid the only way to find them is with a time machine.
Search within yourself to figure out what you really want and what risks you are willing to take. Many investors do very well in C areas. Your price range will invariably lead you to C areas at best.
The key to success is knowing your risks and controlling them. Do not take anyone's word for anything. Look at the facts without the rose (or green) colored glasses and base your decisions on facts and leave emotion out of the equasion. The rules of economics dictate that if an area was a true B class area where properties could be bought for $50k, the smart money would flood in and the values would rise to match any other area of its type.
I hope the best to you. Just remember that education is the key to making sound decisions. If you can sleep at night investing in C class areas then do it. If you can't then you are better off choosing a different approach. You will succeed if you want to. Don't rush into a bad deal but don't pass on a good one because it isn't perfect; few are. @Account Closed
@Sharad M. thanks for the feedback about Merrillville and Hammond. I was intrigued with Merrillville and Hammond because of the low entry points and decent rent / returns.
When I did some City Data research on Hammond, the crime rates looked very high compared to the rest of IN. But I'm hearing that certain pockets may be more favorable than others. This is where I would need to find a good realtor to show me around when I fly out for 'boots on the ground' research. It sounds like you are seeing good returns.
With Merrillville, I looked up a few properties on google maps and pockets of areas looked like all open fields. Based on feedback from another investor that lives in the area, she mentioned that it can get rural quick and her concern was that homes may be hard to rent for that reason. Would love to hear more about what you're seeing in these areas, vacancy rates and to connect. Thanks.
Lena, there are some bad parts of Hammond and Merrillville but as long as you know your neighborhoods, you will do fine. Making blanket statements about an entire city will limit your potential. I flipped a house in Hammond this year for $125k. Sold it before listing it on market. There are investors doing flips in Hammond. You want to focus on good parts of Hammond and stay away from crime ridden areas.
About Merrillville, I don't understand the rural comments. I am closing on a Merrillville house tomorrow which I will rent for $1,100. The demand that I have in Merrillville, I am pretty sure we will have a tenant for this place even before we finish the full rehab.
I have done about 250 deals in last 5 years. I have done deals in good and ****** areas and in between so you gotta know your area really well.
Re: Merrillville, I'm looking on Craigslist and Zillow listings where there are properties renting for 850-900/ mo for a 3bed/1 bath. What kind of marketing are you using to list the properties? What were your entry points? I'm seeing inventory in the $120k range. Are there better areas in Merrillville that you recommend / must stay away from?
Do you have a good property management company that you recommend in the area? I'm planning to make a trip out to the area to check things out in person. Sent you a message - would love to connect - thanks!
@Sharad M. I looked back at my comments because I was a bit puzzled why you disagreed and I made an error in omitting a qualifying comment. What I meant to and should have said was that those properties can't be found in A class areas. You absolutely can easily find properties that produce $1000 rents for $50k in NWI.
I also agree with @Nick Denning in that areas do change from block to block.
My comments boil down to this: NWI is a great place to invest. However, just like anywhere else you have to be familiar with the area so you know exactly what you are buying.
Re: Merrillville, I'm looking on Craigslist and Zillow listings where there are properties renting for 850-900/ mo for a 3bed/1 bath. What kind of marketing are you using to list the properties? What were your entry points? I'm seeing inventory in the $120k range. Are there better areas in Merrillville that you recommend / must stay away from?
Do you have a good property management company that you recommend in the area? I'm planning to make a trip out to the area to check things out in person. Sent you a message - would love to connect - thanks!
Yes, I am in S Side Hessville area. I have about 8-10 projects going on right now in S Hammond and Hessville area.
Regarding Merrillville, I have few 3 beds 1 bath houses and minimum rent I get is $995 per month. Again, you have to know your area really well.
My property manager pretty much manages just my properties or the investors that I work with. Right now, we are adding 4-5 houses per month for my property manager to manage.