[Calc Review] Help Me Analyze This Deal (Ravenswood, Indy)

[Richie Thomas]

Hey y'all, I'm yet another out-of-state investor looking for his first deal in Indianapolis.  I hope to set myself apart from the pack by a) building a local team of experts who I trust, and b) analyzing a lot of local properties in different neighborhoods in order to educate myself before pulling the trigger.  That 2nd point is what this post is about.

As an educational exercise, I've analyzed this MLS property as a BRRRR deal, even though I'm not considering it as a purchase because it doesn't meet my cash-on-cash % criteria. I'm much more interested in getting my erroneous assumptions corrected, and learning where I'm missing the mark. I know that Indianapolis can change character quite quickly from one block to the next, but I've heard that north of 38th St. is less risky than many other parts of town.

Here's the link to the research I've done so far- PDF copies of the BiggerPockets calculations, the MLS listing on Realtor.com, and the Rentometer estimates. In addition, since I know that Rentometer's estimates can be optimistic sometimes, I found a few 2-bedroom for-rent listings on Craigslist. These properties look nearby and their condition is similar to what I am aiming for post-rehab.

I see the property has been on the market for almost 6 months now. Even with the relatively low COC %, I feel like there's still something I'm missing about why this property hasn't sold. It's not far from Butler University, and Ravenswood appears to be a decent neighborhood.  The local K-12 school ratings aren't uniformly amazing, but they're not terrible either. I feel like, at the very least, a college student or someone would have picked this up as a house hack by now. It does appear to be in a flood zone (next to the river)- could that be it? The listing says tenant pays both electric and gas (which I know are the two big local utility expenses), so that seems like a selling point. The property was built in 1975, so there may well be some deferred maintenance going on. But the water heater looks to be in good shape and the roof doesn't look terrible. Maybe it's just the smell from all those cats in the MLS photo that are driving people away haha.

Anyway, curious to hear what y'all think.  Thanks for helping me understand your market!