RULES WHEN INVESTING IN INDIANAPOLIS

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RULES WHEN INVESTING IN INDIANAPOLIS

Jason MalabuteBusiness Member

Accountant · Los Angeles, CA · Member since 2016 · 2k+ posts · 897 votes

I heard that you should be following the rules below when investing in Indianapolis:

High Income is good for Fix and Flip but not Cash Flow.

Rule 1: Household Median Income should be between 40-70K. As you go higher, you'll see a decline in cash flow.

Rule 2: Stay away from areas above 10-20% poverty rate.

Rule 3: Go into areas where Median Contract Rent is between $700 and $1100

Rule 4: You don't want the Unemployment to be higher than the city overall by more than 2%.

1. how true are these "rules"?

2. Why are following these rules so closely related to success in investing in Indianapolis?

3. How strict should I be in following these rules when investing in Indianapolis?

Thanks,

Jason

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Mark Jones

Rental Property Investor · Indianapolis, IN · Member since 2017 · 104 posts · 47 votes

@Jason Malabute generally speaking I like those rules. I’m not sure how practical it is to apply them. How you define your “area” could definitely give you inaccurate numbers. There are larger areas in Indy where the neighborhoods are pretty uniform. But there are many areas where you’ll have half million dollar homes that are a block over from homes that is essentially worthless (except for the lot) and need bulldozed.

This will really mess with your income and poverty numbers for an area.

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Mark Jones
Rental Property Investor · Indianapolis, IN · Member since 2017 · 104 posts · 47 votes
7y
@Jason Malabute generally speaking I like those rules. I’m not sure how practical it is to apply them. How you define your “area” could definitely give you inaccurate numbers. There are larger areas in Indy where the neighborhoods are pretty uniform. But there are many areas where you’ll have half million dollar homes that are a block over from homes that is essentially worthless (except for the lot) and need bulldozed.
This will really mess with your income and poverty numbers for an area.
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Jason MalabuteBusiness Member
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Accountant · Los Angeles, CA · Member since 2016 · 2k+ posts · 897 votes
7y
Originally posted by @Mark Jones:

@Jason Malabute generally speaking I like those rules. I’m not sure how practical it is to apply them. How you define your “area” could definitely give you inaccurate numbers. There are larger areas in Indy where the neighborhoods are pretty uniform. But there are many areas where you’ll have half million dollar homes that are a block over from homes that is essentially worthless (except for the lot) and need bulldozed.
This will really mess with your income and poverty numbers for an area.
Thank you. I sent you a DM.
Malabute & Company CPAs525 Reviews
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Kerry Noble JrPro Member
Investor · Indianapolis, IN · Member since 2018 · 2k+ posts · 1k+ votes
7y
I would simply get with someone who has knowledge of the area before u buy anything......feel free to connect
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Ian McCullough
Sacramento, CA · Member since 2019 · 8 posts · 4 votes
7y
Hit me up, I lived there for 20 years. Moved back to Cali lol. But have 3 rentals there. Mark is right, really gotta kinda know the area.
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AJ Whitaker
Rental Property Investor · Denver, CO · Member since 2019 · 30 posts · 9 votes
7y
Sounds like some solid rules, from my research so far seems like there are some areas that are pretty bad far as crime but about a 5min drive from some pretty high price/income homes.
I have been thinking about doing a TK property there, would be interested in what people think.
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