All Forum Posts by: Jonathan Tao

Hi all, 

I recently purchased my first duplex. It's an OOS investment in a great pocket of Indianapolis with great cash flow day 1. I know it's likely lower appreciation, which is something I'm ok with since I wanted to build my income foundation first. I have some capital to deploy and looking to get into my second deal but hoping to get some advice from more experienced folks. 

Trying to decide how to allocate my resources between the following options. I'm based out of Los Angeles so buying a property in SoCal is somewhat out of the picture due to high prices. I'm debating between the following 

• Buy another 2-5 rent-ready resi units in the same market to cash flow (Indy) 
• Buy some BRRR resi deals in the same market so I can recycle my capital (though my day job is pretty time consuming so not sure I have that much time to oversee these projects even at a high level)
• Buy 1 deal in a slightly higher cost market with more appreciation upside but less cash flow (e.g., Charlotte, Raleigh, Dallas, Phoenix)

I know the answer will ultimately depend on the person's personal preference, financial goals/situation but curious to hear what others have done and any lessons learned. 

@Adam Smith - Curious did you ever get this classification? Are you paying ~2% of assessed value (lower of the two options)? What's your experience been like with property taxes over the last couple years

Hi everyone - I'm looking to build and grow my network in Indianapolis. I'm an out of state investor and currently have a duplex out in Franklin Township under contract. I'm looking to network with other investors in this market as well as build my local network/team so if anyone has any referrals in the following, that would be greatly appreciated. 

• Contractors - Looking for good quality contractors that can help provide rehab estimates. Huge plus if they're able to walk the properties on my behalf. I have an agent I'm working with but sometimes they're unable to get their contractor/property manager to walk properties so it's hard to get a sense of what construction costs will be. Would compensate for their time or open to exploring alternative partnership options. 
• Inspectors - anyone have good referrals here?
• Investors - would love to connect with other investors in the area to chat about what's worked for you and what hasn't
• Local experts - sounding board to bounce ideas off of 

Thanks again for the time and look forward to connecting with folks! 

@Mike D'Arrigo - Thanks for the feedback. The contingency and admin were really just "misc" expenses for LLC filing, any potential travel, etc. that i was bit concerned about but now that I'm looking at it, I don't think they need to be there. The savings there offset the fact I was understating my PM and leasing fee so somewhat of a moot point.

WRT to RETs, I pulled the last assessed value and grew it by 3% multiplied by 2%. Curious - how do reassessments work generally speaking in Indy? 

I do agree, I think the deal still pencils and generates some cash flow even on my conservative assumptions (e.g., 10% R&M contingency on top of capex reserves). That said, there are some immediate repairs for this deal, likely in the $15K range (per my property team and broker who both toured it). 

Given your experience in this market, is this the type of cash flow you're seeing today or more recently?  

@Eric Hart thanks for the feedback! I'll be sending you a direct message later this AM with the specifics as I know Indy really varies by neighborhood and street. I've been working with a local PM so been leaning on their feedback but would love to get more insight from others. Overall I feel my base case is reasonable but like you said, just getting ~100-150$ FCF a month (or 6-7% ROI) seems kind of low for Indy, no?

@Kat He thanks! My PM and mortgage are already quoted so I feel good about them. The admin and contingency were more so for paperwork, filings and even out of pocket expenses by PM, which can be more.

I stressed my scenario by using +5% for best case and down 15 or 20% for worst case, which may be a bit draconian but looking at protecting equity.

That being said, even in my base case - a 6-7% ROI feels light for a market like Indy

Hi all - I've been looking to acquire my first rental property and have been looking in Indianapolis for the last few months. I've been focused on this market largely due to its stable cash flow as well as moderate appreciation (know it's not as high growth as others). That being said, I am looking for some help to review my proforma - am I missing anything? If anyone has feedback on this market, would love to get your thoughts. My biggest concern is that prices are just too high for SFH right now and for a market like Indianapolis, I feel like I'm paying top of market; however I'm really itching to just get in and start learning...

Indy Rental Analysis