RULES WHEN INVESTING IN INDIANAPOLIS

[Jason Malabute]

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

[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.