Investing in Indianapolis! Best Neighborhoods?

Rental Property Investor · Oakland, CA · Member since 2016 · 341 posts · 643 votes

Hello BiggerPockets Indiana Community!

What are some of the best B and C neighborhoods in Indianapolis for investing? And WHY? I'd love to hear your take on the city.

Thanks!

Tyler

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Ross Denman

Real Estate Consultant · Whitestown, IN · Member since 2014 · 547 posts · 933 votes

@Tyler Jahnke

Are you looking for long-term rentals or short-term holds. If you are looking for a 5 year investment in the up and coming areas... follow the historic districts.

Fountain Square
Irvington
Fall Creek
Little Flower Parish
Windsor Place
Highland Park
Brookside
Tuxedo Park
St Claire Place

There's really more than can be listed. Be sure to have someone drive the street and ensure that you are not purchasing in a ghost town though. While it's getting better, there are still streets in Indy where all but 3 or 4 homes are boarded up, abandoned, and/or owned by the city. These are very difficult properties to do anything with.

The "short-term hold" strategy is to do a rental rehab and tenant it for about 5 years. It's not a big money maker, but it will wash it's face. As soon as the area comes up enough... wait until your tenant moves out (or don't renew their lease) and do an extensive rehab and sell the home and 200-300% of what you have in it. I've seen this done a few times in Fountain Square. I know of people who had amazing deals in Irvington and will probably sell a house that they have less than $100k in and will sell it for over $200k.

_________

If you are looking for your standard long-term rentals, the most common ones are going to be the 1960's-1970's ranches in Lawrence and Warren areas on the East Side or Eagledale on the West Side. I prefer Eagledale to Lawrence, but they're not that different as far as market rates, maintenance, rental rates, tenant demographic, etc.

I would recommend targeting homes that will rent for at least $800/mo and have at least 1.5 baths. A study that we did last year shows that we are having considerably higher tenant retention on homes with more than 1 bathroom. Families seem to outgrow bathroom space faster than anything.

@Eric Gettelfinger

We manage several rentals in Fountain Square and it's amazing with everything that has been done there, but I feel that it may be in a bubble. It's hard to find "well-priced" deals and while the area is appreciating like crazy, I am not sure that it can continue much further before being over valued.

With that being said, the new tech jobs coming in to the downtown landscape is a huge catalyst for the restorations of the historic neighborhoods. These young professionals love these beautiful homes. There are some great opportunities to be had just outside of the FS area. There is a lot of activity in Bates-Hendricks, Windsor Place, Highland Park, etc. The near East Side (St Claire Place) is starting to come along but it's still another year or so before it sees any sustainable changes.

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Cindy Donley
Investor · Austin, TX · Member since 2016 · 16 posts · 12 votes
9y
@Tyler Jahnke I like the older/est probably C neighborhoods. I like them most because my hearts in it--okay, I know we're here to make money, but I love these houses, love being a part of bringing the neighborhood up and hope that this will make my investment worth more. I don't go right into the middle, but on the perhiphreal in order to grab hold of the better area and try to move it toward the not so good, if that makes since.
I'm currently working in 46201 and love these houses and am watching the businesses and streets change. I haven't been around long, but I can see what things look like now, what's happened recently and where it can go, I'm excited to be a part of it!
I am loving the city. I'm an old Austinite and enjoy going to Indianapolis and getting to know the people and get a feel for them. Love the city and plan to stay close to downtown with my investing.
5 Reply
Eric Gettelfinger
Investor · Indianapolis, IN · Member since 2016 · 5 posts · 2 votes
9y
I would recommend around the Fountain Square area! It is hot right now, with several deals to still be had.
1 Reply
Aaron B.
Investor · Indianapolis, IN · Member since 2015 · 80 posts · 82 votes
9y
@Tyler Jahnke, you ask a very difficult question without better understanding your goals. I moved to Indy this Summer and have spent the past 5 months driving the city and chatting with local experts. I would really encourage you to take a trip out to Indy (not right now because you will freeze your nuggies off). The one thing I have learned first hand is the more I learn about Indy's neighborhoods the less I know. As you are out of state, I am guessing you are a buy and hold investor. I personally like to evaluate properties based on their numbers and I have found that within same neighborhoods you get good and bad deals.
More to you question. I think a lot of folks will point to Fountain Square, which is really a great place, but locals will be able to get into the nitty-gritty of other up and coming places. I like the areas surrounding Fountain square because I think they will see revitalization as FS gets more expensive and prices people out. For example, Bater-Hendricks and west of Woodruff place. A bit of a more suburban market would be Lawrence and Perry township. Although suburban Lawrence also has some pretty tough areas.
I tend to have stay-away zones for example North: between 30th and 38th, east/west between Crown Hill and Fall Creek.
This article was shared in a separate post: http://indyeast.org.
Please feel free and reach out directly. I have nothing to sell you.
6 Reply
Jack Gibson
Investor · Saint Joseph, MI · Member since 2015 · 93 posts · 50 votes
9y
@Tyler Jahnke I invest on the East and Northeast primarily (about 60 units there) and on the West side have about 20 units. I think Fountain Square, Bates Hendrix are great areas, the ROI's are not as strong in these B and A areas, could get more appreciation play here. I love cash flow, and like Cindy I love being a part of improving an area, so C class on the East side like Washington st., New York, Capital, Euclid (to name just a few) is where the ROI is going to be strongest, as long as you have great property management, and price to rent ratio is strong, you'll be in good shape in a lot of areas, there are no war zones in Indy.
2 Reply
Tyler Jahnke
OP
Rental Property Investor · Oakland, CA · Member since 2016 · 341 posts · 643 votes
9y
@Aaron B. Thanks so much for the detailed response!! Hope you're enjoying your time out in Indy. Stay warm hahah!
0 Reply
Carlos Altamirano
Investor · Los Angeles, CA · Member since 2015 · 325 posts · 75 votes
9y
hello @Tyler Jahnke
I reside in Orange, CA and hold all my units in Indy. I hold 28 units there, and currently in escrow for 60 units in Beech Grove! Fountain square is a great area. Carmel and Fishers are going through tons of development also. Will be happy to further connect!
Talk soon
2 Reply
Tyler Jahnke
OP
Rental Property Investor · Oakland, CA · Member since 2016 · 341 posts · 643 votes
9y
Hi @Carlos Altamirano
Great to meet you! Thanks for the input on Indy neighborhoods. I'd love to connect!
Tyler
0 Reply
Neil Goradia
Developer · Indianapolis, IN · Member since 2012 · 259 posts · 129 votes
9y
Carlos - Beech Grove is a great rental area, very old-timey feel and great renters in my experience. Congrats on the 60 unit!
3 Reply
Randy Middleton
Beech Grove, IN · Member since 2015 · 1 post · 0 votes
9y
I am new, as in just joined Bigger Pockets Pro, and live in Beech Grove, IN. Want to start with property I can actually drive to, check on, etc. Call me paranoid, but...
If I can help anyone in this area, let me know. I am sure it would be a good learning experience for me.
Randy
0 Reply
Mike D'ArrigoPro Member
Turn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
9y
@Tyler Jahnke There are several good B and C class neighborhoods. I like a lot of the areas in the Warren and Lawrence townships and although most of those areas are fine, some are better than others so you really have to know the neighborhoods. You really won't find anything below C class in these areas and you'll find some nice B class areas. I particularly like the area south of 30th St and north of 10th St between Arlington on the west and N. German Church on the east. I also like the Devington area between 42nd on the south side and 46th to the north and Emerson on the west and Arlington on the east. There's a lot of other good areas too but you have to be careful. Indianapolis can vary neighborhood to neighborhood and even street to street. We sell turn keys in Indy and know the area well. Feel free to reach out if you'd like more insight.
3 Reply
Tyler Jahnke
OP
Rental Property Investor · Oakland, CA · Member since 2016 · 341 posts · 643 votes
9y
Thanks so much @Mike D'Arrigo ! I actually sat down and met with a local investor today and he referenced Pinnacle. I'll be in touch later this year when I look to acquire another property.
-Tyler
0 Reply
Mike D'ArrigoPro Member
Turn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
9y
@Tyler Jahnke Great. I hope they said good things! Let me know if I can help in the future.
0 Reply
Ronn Johnstone
Indianapolis, IN · Member since 2017 · 30 posts · 5 votes
9y
@Mike D'Arrigo Thanks for the specific tips! It helps me look at those demographics, and understand more what makes for an "investable" neighborhood.
Ronn
0 Reply
Deanna Anderson
Batavia, IL · Member since 2016 · 21 posts · 14 votes
9y
@Tyler Jahnke As others have noted, there are some great up-and-coming areas in Indy. I would suggest visiting in person, however, as conditions can change from one street to the next.
@Cindy Donley My husband and I have been looking at properties in 46201-- we like the idea of helping to build up neighborhoods as well. I'd love to hear more about how you're investing in the area.
2 Reply
Ross Denman
Real Estate Consultant · Whitestown, IN · Member since 2014 · 547 posts · 933 votes
9y
@Tyler Jahnke
Are you looking for long-term rentals or short-term holds. If you are looking for a 5 year investment in the up and coming areas... follow the historic districts.
- Fountain Square
- Irvington
- Fall Creek
- Little Flower Parish
- Windsor Place
- Highland Park
- Brookside
- Tuxedo Park
- St Claire Place
There's really more than can be listed. Be sure to have someone drive the street and ensure that you are not purchasing in a ghost town though. While it's getting better, there are still streets in Indy where all but 3 or 4 homes are boarded up, abandoned, and/or owned by the city. These are very difficult properties to do anything with.
The "short-term hold" strategy is to do a rental rehab and tenant it for about 5 years. It's not a big money maker, but it will wash it's face. As soon as the area comes up enough... wait until your tenant moves out (or don't renew their lease) and do an extensive rehab and sell the home and 200-300% of what you have in it. I've seen this done a few times in Fountain Square. I know of people who had amazing deals in Irvington and will probably sell a house that they have less than $100k in and will sell it for over $200k.
_________
If you are looking for your standard long-term rentals, the most common ones are going to be the 1960's-1970's ranches in Lawrence and Warren areas on the East Side or Eagledale on the West Side. I prefer Eagledale to Lawrence, but they're not that different as far as market rates, maintenance, rental rates, tenant demographic, etc.
I would recommend targeting homes that will rent for at least $800/mo and have at least 1.5 baths. A study that we did last year shows that we are having considerably higher tenant retention on homes with more than 1 bathroom. Families seem to outgrow bathroom space faster than anything.
@Eric Gettelfinger
We manage several rentals in Fountain Square and it's amazing with everything that has been done there, but I feel that it may be in a bubble. It's hard to find "well-priced" deals and while the area is appreciating like crazy, I am not sure that it can continue much further before being over valued.
With that being said, the new tech jobs coming in to the downtown landscape is a huge catalyst for the restorations of the historic neighborhoods. These young professionals love these beautiful homes. There are some great opportunities to be had just outside of the FS area. There is a lot of activity in Bates-Hendricks, Windsor Place, Highland Park, etc. The near East Side (St Claire Place) is starting to come along but it's still another year or so before it sees any sustainable changes.
11 Reply
Tyler Jahnke
OP
Rental Property Investor · Oakland, CA · Member since 2016 · 341 posts · 643 votes
9y
Hi @Ross Denman - Thanks so much for your detailed response. You've provided a ton of valuable information.
Any reason why you like Eagledale over Lawrence?
I'll be reaching out to connect!
-Tyler
0 Reply
Richard AndersonPro Member
Professional · Batavia, IL · Member since 2016 · 104 posts · 39 votes
9y
@Ross Denman do you have any thoughts on Springdale? My wife and I have spent hours driving for dollars in St. Claire Place and Springdale. We're excited about what's happening in St. Claire, but are wondering if Springdale is eventually going to develop like Fountain Square and St. Claire? Would love to hear what you think.
0 Reply
David Rollings
Investor · Indianapolis, IN · Member since 2014 · 35 posts · 12 votes
9y
I'm liking Irish Hill north of Fountain Square, Bates Hendricks, and the old Southside. Just my 2 cents. South Fountain Square still has good cash flow properties. North Square is getting more and more spendy.
1 Reply
Maxwell Lee
Real Estate Investor · Miami, FL · Member since 2013 · 474 posts · 214 votes
9y
I've been researching Indy for about two months, purchased several houses in that time frame lol, and I still don't feel like I have a great handle on it. There are over a dozen neighborhoods that I really like on paper, and over a dozen more that are very appealing but don't quite fit my criteria at the moment, and it's a bit overwhelming. I do note that almost all of the neighborhoods above are still block-by-block so you must still be careful.
Contrast to Jax where there are only maybe half a dozen hoods that would fit our criteria. Much easier to focus and determine which blocks are the winners...
0 Reply
Shawn Holsapple
Residential Real Estate Broker · Indianapolis, IN · Member since 2010 · 1k+ posts · 557 votes
9y
Welcome to Indy @Tyler Jahnke !
All good points above.
IMHO - I would suggest starting off with SFH assets that are built after 1945 & that rent for $700 and up.
Yes, you might miss out on an "up and coming" neighborhood but you will also miss out on war zones, high CapX and other headaches...
Just my 2 cents.
2 Reply
Tyler Jahnke
OP
Rental Property Investor · Oakland, CA · Member since 2016 · 341 posts · 643 votes
9y
@Maxwell Lee - So you decided to pull the trigger on Indy? That's awesome! Where did you decide to buy?
-Tyler
0 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
9y
@Tyler Jahnke we are active in bates Hendrix and fountain square and for higher end .. just north of town off of Broadway.. we have a 550k flip there that closes in 2 weeks.. better margins there than I can do in PDX for sure.
what I like about bates and fountain.. is that there is a ton of infill going on.. so you can buy a nice B class turn key and as the area continues to get better.. IE builders building new and homes getting 100 to 150k pop top remodels it will drag your rental property up.. and for an exit in 10 years you can probably remodel and sell retail.
wereas in the HOOD with 50k and under props your stuck for life.
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1 Reply
Ross Denman
Real Estate Consultant · Whitestown, IN · Member since 2014 · 547 posts · 933 votes
9y
@Jay Hinrichs, as usual, I completely agree regarding properties under $50k. There may never be a retail market there again. These properties seem to be like poker chips collected by investors.
Something to consider. In the post-market collapse, it is more stringent to get conventional loans for homes. We will probably never see "creative" bank financing again. The days of no money down, multiple mortgages on multiple positions, etc. are probably not coming back. In order to purchase a home in today's world, you will likely have to have some form of trustworthy credit and a little skin in the game to put down a down payment. Most people who manage their obligations wisely and can save a little money don't care to live in these neighborhoods. These areas are riddled with poverty, crime, poor school systems, etc. A lot of newbie investors will buy here because they are inexpensive, but IMHO they will probably never have any true value. Even though they can cash flow, the market demographic can be very undesirable and unstable. While we manage a lot of decent properties in these C-Class neighborhoods and there are decent tenants, you have to be very selective to have any type of stable success. Given enough time, you will have a bad experience that may cost you a couple of years of income to restore it back to a stable performance.
I will hesitate to invest anywhere that I don't foresee a retail opportunity either now or in the near future.
3 Reply
Jithin Yohannan
Baltimore, MD · Member since 2017 · 5 posts · 2 votes
9y
What is your take on the Brookhaven neighborhood, zip code 46226. Specifically 52nd street just west of route 31?
I am an out of state investor thinking of investing in a turnkey here. Looking for good, stable cash flow and modest appreciation.
2 Reply
Ross Denman
Real Estate Consultant · Whitestown, IN · Member since 2014 · 547 posts · 933 votes
9y
Typically, the neighborhoods get better north of 56th St anywhere across town. 52nd St isn't too bad though. The worst places in Lawrence are going to be around 38th St and 42nd St. I would look that the crime map for that specific area. I use Trulia for this. I would also ensure that the rent will be $750/mo+ and even better if it is $800/mo. That will put you on the higher end for the area.
4 Reply

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