Anyone Investing south of 42nd St in Butler-Tarkington?

Question

I'd love to hear your opinion on the area south of 42nd St in Butler-Tarkington, especially if you are active in that part of Indy. I'm mainly considering a buy & hold or BRRRRR strategy.

Erin Donlan · Answer

Personally, I don't know that I'd advise an out of state investor to invest over there. Like Lee said, the farther south you go, the more crime you get into. About a year ago, there was wave of homicides in the area - luckily the community came together and that seems to have subsided (there was a story in the Indy Star recently where they said they were celebrating a year without homicides: http://www.indystar.com/story/news/crime/2016/10/13/homicides-jump-across-indianapolis-one-neighborhood-gets-reprieve/91986988/). The city has targeted 38th and Illinois as a place for future economic development (it's highlighted in their 2020 Great Places plan: http://greatplaces2020.org/maplecrossing/), so things could turn around in the not so distanct future, but knowing that in Indianapolis we're typically slow to change, I don't know that I would bet on it.

Just my two cents. Hope that helps!

Ross Denman · Answer

We manage around 20 homes in the area between 38th St and 42nd St. Personally, I wouldn't go south of 38th St (Crown Hill area) as it continues to degrade until you get closer to the city. I think we had two evictions in those homes in the last year and that's the only major problem we've had. It is possible to find decent tenants, but many of them may be slow pays from time to time.

The Ten Point Coalition is very active in this community and they are claimed to be the ones who have had a major impact on the murder rate here.

All of the historic districts in Indianapolis are rapidly changing as the quickly growing tech sector is drawing young professionals to Indianapolis. Companies like Salesforce, Determine, Pondurance, Kronos, Appirio, Angie's List, Torchlite, etc employ thousands of young professionals who love to rent in the revitalized historic districts. Butler-Tarkington is likely going to continue to be an area that will be getting their attention.

I am a huge fan of a short-term hold strategy in the Indianapolis historic districts. I have investors who have seen around $100k+ in appreciation over 5-7 years in Fountain Square, Irvington, and Broad Ripple. I believe that this area holds the same type of opportunity.

Lee Smith · Answer

@John Blythe 38th st is a bit of a high crime street.. It's a main artery of Indianapolis, and there are a lot of apartments that if you can fog a mirror they will accept you... haha As you go farther north or south the crime softens quite a bit..  Same with roads like Washington and parts of Meridian..

Aaron Cullen · Answer

I second what @Matthew Schroeder has said about checking the property taxes on a property before you buy it. You also have an option of appealing the tax assessment. There are a few companies out there that will do it. I recently used AppealTaxes-NOW.com to represent me in appealing the assessed valuation of two C class properties. They were able to get it reduced by 50%+ on both properties. For the 2015 and 2016 years I'll get a credit and the valuation will now be at the new amount until.... the city does a new assessment ;-) I'm curious to see when that is.

Hugh S. · Answer

This comment may be just noise, but for what it's worth. Assessed values for Indiana moved to a market based valuation a few years ago. Property taxes for non owner occupy properties in Indianapolis / Marion County are 2% of market rate, based on most recent arm length's sale ($40,000 purchase price = $800 annual property tax). The purchase price should hold for assessed value a couple of years at least, then it begins to shift based on an algorithm of recent, local sales. Someone else can correct me whether a BRRR strategy actually could be used for the 1% owner-occupy rate, but if it does, then the property tax would be $400 from the example above.

Agree with comments about 40th being a cut-off for anything south. There are many good as well as bad pockets below that, street by street. Worth taking a chance if you know the neighborhoods well, including historical patterns, but I'd tread carefully or steer clear altogether - there are many Indianapolis neighborhoods far less riskier. Someone else can comment further, but I'm not aware of any Fall Creek-style wholesale neighborhood redevelopments on the horizon that could "lift all boats".

Edward Rhoads · Answer

I have a house at 40th and Cornelius.  Will be a fix and flip though.  A bit nervous about it.  Think it would be tougher to buy and hold in that area.  Would not go south of 40th though that is the limit.

Monti Harris · Answer

Lived in Indianapolis for decades, just started investing two years ago.  What I noticed is a lot of properties for sale in the bad areas of town by out of state investors.  I hope you don't "trust" the guru's advice that Indianapolis is great, when they don't even know the area.  Spoke to an investor from Hawaii who bought his bad area property at a REI event.

Lee Smith · Answer

@Erin Donlan  I LOVE the areas that are labeled high crime.. To me that's a sign that it's time to buy!!  Indianapolis is really great at going into those areas and really striving to clean them up...  Granted you have to know how to work those areas, but I always smell cash when I walk into those areas.. hehePS - When are you buying me lunch?

Lee Smith · Answer

@Ethan Anderson I have several rentals south of 42nd over in that area.. Byram, Cornelius, etc..It's a decent area, but rents start going down a bit.. 3 bedrooms rent for $700-800 unless it's something special...

Anyone Investing south of 42nd St in Butler-Tarkington?

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