Thinking of investing in Indianapolis now.... Is it too late?

Question

It's Feb 2016, the real estate recovery in full swing. Am considering investing in Indianapolis now, am I too late to the party? Would be thrilled to hear from other out of state investors and local investors/rehabbers/property managers as well.

Thanks!

Jay Hinrichs · Answer

@Bobby Sharma   think of how people market the mid west.. GREAT for cash flow but no real appreciation ( at least in cash flow renter dominated neighborhoods)  So your not too late it will always be there.. there will always be inventory to buy in any rental dominated area like INdy, Memphis KC  etc etc.. Landlords goals change over time and they wish to exit all the time.. and buyers will do what buyers do in those areas and they will back into sales price based on return / risk..   I have been funding those markets for almost 20 years now and they don't go up and unless your house is trashed they really don't go down much..   Lots of options in the mid west rental market .. your success will largely corilate to your PM long term

Lee Smith · Answer

Jay's analysis is pretty good... Depending on your goals, the deals are here...  Our appreciate/depreciation rate is about 3%.  Even in 2010 our bread and butter neighborhoods were only down about 10%.What are you looking to invest in? Are you looking for buy and hold or flip?  Flipping is tough because we get a ton of out of state investors who are fed a line of malarkey and just don't understand our market... It's doable, but much hard to find deals, and you need to be QUICK to get them under contract when you find one.Buy and Hold is very doable. Depends on what kind of properties you want to invest in. A-B- properties are going to run you 80-120k... You can get into lower end neighborhoods for 35k+.. You need a property manager that understands that market though.. We work in that market, but there is high turnovers and you really have to do background checks, etc to make sure you are getting quality.BE CAREFUL: I get hit up at least 1-2 times a month from investors who paid to much for properties, and rehab... You need to be very careful. If you can fog a mirror you can get a General Contractors license in Indiana.. Make sure property managers are licensed. PM's need to have a Principal Brokers license in order to manage other peoples properties. Most of the times I see issues, it's with an unlicensed PM...If you have specific questions, hit me up with a private message or give me a call.

Justin Simpkins · Answer

@Jay Hinrichs

@Todd Burton

@Lee Smith

Thank you for you insight, hope you guys don't mind if I pm you.

Mark Wainscott · Answer

South Bend sounds alot like Indy.  @Makenzie Kelly How are the wholesales? Any tips? I would like to start out doing a couple and pickup a couple rentals around here.  About 150 miles North of Indy.

Makenzie Kelly · Answer

@Bobby Sharma, hey there! San Leandro native here!

I've been wholesaling and investing in Indy for over a year now and i'm seeing the trends going in the right direction.  However as the gentlemen above have mentioned, this is primarily a cash flow market.  Not an appreciation market.  Which is your goal to hold or to flip?

To compare this market to SF is like apples and oranges.  SF is dangerously low on inventory and as you've seen people are paying $4500+ for a studio.

You can easily get double digit returns on properties in Indy.  Hit me up if you want more detail or to chat.  I'll be heading back out there in April. ~ Makenzie

Bobby Sharma · Answer

Thank you @Todd Burton and @Alain Perez-Majul

Just want to post some observations, not looking to disagree with anybody, but just looking at data here. Here is what I have uncovered from reliable sources : The inventory in Indy has gone from 14K in 2012 to 10K in 2016, that is still a ton of inventory. Compare that to the county that I live in (near SF, population of 1.6M) where there are only a few hundred homes for sale, Indy looks appealing and yet a very dangerous investment. Supply is shrinking but there is still a huge supply available. It is trending in the right direction but come on, almost 10,000 homes are still available. One significant mortgage rate increase some sort of a shock to the economy, then all bets are off.  I think there has been appreciation in Indy market from pent up demand, which is good but there are still 10K homes that need to be absorbed.

Having said that, the prices in Bay Area are ridiculously high and are at a greater risk of decline than Indy. And of course, no cash flow if you buy now over here.

I would love to hear from other out of state investors to see how well they did investing in Indy. So far, all I have been told is be careful about what pockets you buy in, be careful about bad property managers, be careful about over promising and under delivering professionals. All solid advice and I will take it into account but hoping to get more specifics.

I do appreciate the great advice provided so far and I am definitely going to take all of it into account before moving forward with investing in Indy.

Alain Perez-Majul · Answer

@Bobby Sharma

The party is still accepting people! As Louise said, it's tight, but deals are there to be found. Also, as Todd mentioned, it's important to do you due diligence and have strong partners locally.

Happy investing!

Cheers

Todd Burton · Answer

Indy is still a great market for cash flow properties. We purchase and rehab 6 to 8 every month and have for many years. It's harder now to find good properties at the right prices but it absolutely can be done with diligence (maybe I shouldn't be so encouraging since you'd be more competition :) . We also manage and concur with Lee; we constantly see out of state or out of country investors who have been sold something less than expected and often end up in a bad spot. Be care, due your homework and get good partners on the ground.

Louise A. · Answer

@Bobby Sharma

There are always deals to be found!  The market is really tight, but with persistence you can make it work.  What are you looking to buy?

Thinking of investing in Indianapolis now.... Is it too late?

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