All Forum Posts by: Matthew Schroeder

Make sure that the comps are truly comps (apples-to-apples comparison). To do that, you would need to at least drive by each comparable property, to compare them to your property. In Indianapolis, it is not uncommon to see huge variances & differences in comps - a couple of blocks can sometimes change prices/values by 100%!

Put aside $/sf for a moment - that can be a handy tool, but it has limitations.  Look around at the immediate neighborhood.

The neighbor directly across the street (4805 Aberdeen Parkway) is an active listing with an asking price of only $424,900!  Yes, it is smaller than your property, but do you think that the market "values" your property $75,000 more than your neighbor?  Importantly, also note that the property has been on the market for 60+ days as well, and they have also had a price decrease, so there hasn't been enough interest around that price level for a willing buyer to purchase their house, either.

Another similar story around the corner at 8007 Pilgrim, which is listed at $429,900.  That property has been on the market for ... 270+ days!

Very interestingly, both of the neighboring properties are on the market for asking prices very close to their assessed values.  If you were (hypothetically) to do the same thing, your asking price would be +/- $455k.

@Erin Donlan  Thank you very much for sharing!  

I checked out the website with great interest as the topic of good/best neighborhoods in Indianapolis is a frequent topic on BP, but while the website certainly has a lot of "data", unfortunately it provides quite little in terms of "information value".

What do I mean by this?

I tested a few "neighborhoods" in the application, and the unfortunately data can be highly misleading (Note:  How this website defines "neighborhoods" may be different than common definitions (one simple example would be how they define the borders of Fountain Square - I don't think that most real estate professionals would say that Fountain Square goes that far east).

Also, if you take as an example a neighborhood like Butler-Tarkington, on the south end (38th-42nd), it can be quite rough and $50k houses can be found readily, but in the northern end of the exact same neighborhood, you can find beautiful virtual mansions with manicured lawns which can easily be $500k - $1MM.

So, just to summarize, while there are some "tools" which can be helpful, this just further illustrates once again, how difficult & challenging, Indianapolis can be & how one must do their own due diligence.

Best,

Matthew

Dear BP Members,

Note:  This post is for general information purposes only & not an advertisement.

CNBC ran an interesting story earlier today (see link below) about a company named B2R (which is owned by Blackrock) which is offering loans to property investors for rental properties.

This is not an advertisement for the company nor the product & I have never used them, but as a real estate investor, I was intrigued, so I thought I would share.  

This product is primarily targeted to buy & hold investors and apparently they will do up to 80% LTV, up to 30-year loans, and there is no income requirement (rental income is their primary determinant).

If anyone has used them, would be interested to hear your feedback.

Loans for Investors
Loans for Investors (CNBC Video)

B2R

B2R Finance (Website)

Best,

Matthew

@Jay Hinrichs  The area due north of downtown Indianapolis is Old Northside (12th Street - 16th Street), which the City of Indianapolis considers a "historic neighbhorhood", but it is far from a sleeper with old, Victorian houses easily going for $500k - $1 million (http://www.oldnorthside.org/).

I believe the neighborhood you are referring to is Herron Morton (http://herron-morton.com/), which is also a "historic district" (16th Street - 21st Street) and has some really stunning/modern new builds & impressive Victorian renovations, which can be had in the $300k - $400k, but can easily go up to $500k - $600k.  As @Louise A., unfortunately from an investment perspective, this neighborhood would no longer be considered "sleepy".

Fortunately, there are other "sleepier", equally close neighborhoods with similar distance/proximity to downtown Indianapolis in other directions (east & south, primarily) including Holy Cross, Fountain Square and the much talked about Bates-Hendricks neighborhood.  In these neighborhoods, you can also see some fantastic renovations & new builds, but the prices are a fraction of Herron Morton & Old Northside.

Dear BP Members Interested in Indianapolis,

For anyone who has been to Fountain Square recently, they can see that the neighborhood is being transformed.  It is not uncommon to see newly renovated Victorians and new construction in the neighborhood listed at +/- $300,000.

As evidence of the strong market trend, below is an article from the Indianapolis Business Journal discussing a new, proposed $20 million apartment project in the neighborhood.

http://www.ibj.com/articles/59167-developer-plans-...

Bill S. You are the man!!! Awesome job & thanks for sharing your story. I wish you much continued success!

@Soh Tanaka  Tanaka-san, excellent work on the due diligence!  You are absolutely doing it the correct way.  Good luck and I wish you much success!

Considering you are doing some deep analysis, you surely pulled sales comps for 4-plexes (or, if not available, other MFRs) in the area.  How does your subject property compare? 

Get sales comps of duplexes within a 0.5 mile radius and that will give you a good idea what the 'market value' of the property is.