2020: Double-digit appreciation.

2021: Double-digit appreciation.

2022: Double-digit appreciation. 

Post-Covid, Indy has appreciated about 25-35%, as other large metros have. 

Interest rates are currently sitting in the low 7’s. 

Considering this, does Indy still make sense as an investing target market? 

Let’s zoom out:

• Indianapolis is ranked as the 6th most affordable large metro area in the nation (source: NASDAQ). 
• Indianapolis is on-average one of the fastest growing city in the Midwest, attracting a large amount of relocation from the state of Indiana and places like Chicago. 
• Indy still has one of the lowest relative-to-the-nation unemployment rates (right now 2.5%). 
• Indianapolis has had more invested capital landed here in the past 4 years than the past 25 years combined.

What’s going on?

Indianapolis is making the same transition a lot of medium-sized cities have — Nashville, Charleston, Charlotte, etc. 

Outside capital, people with deep pockets, are landing capital where there is opportunity, and that is Indianapolis. 

Hendricks Group recently finished a multi-million dollar build out rehabbing the old Coca-Cola Plant. Now crowned as the Bottleworks District. The surrounding neighborhood has appreciated 15%+ this year. This isn’t an isolated event. In fact, Hendricks owns a lot more land downtown, and there are a lot more plans in the works…

16-Tech in the Riverside area, a tech innovation hub. Billion-dollar IU health buildout on the near Northside. A center for the most elite surgeons and doctors in the world. Indy 11 soccer stadium & complex being built out, replacing the defunct Diamond Chain Factory. 1820 Ventures razing the old girls jail on the eastside, paving the way for multi-million dollar Multifamily complexes. 

Critical mass in capital and population growth is already here. Its right in front of you. You just have to zoom out. 

The strategy in Indy now is this — Make sure it cash flows, hold on for the appreciation. Average rent in Indy is still around $950. This won’t last long… Rents will rise, a lot. Property values will rise, a lot. 

How do you buy for cash flow in Indy? 

1. Speed. You need to land offers quick. 
2. Opportunity. You need to see opportunity where others don’t.  Higher days on market listings. Types of value adds others don’t seem to want to do. Being plugged into the right network. (We can help there.)
3. Transitional Neighborhoods. There are plenty of properties in developing neighborhoods where you can find qualified tenants and cash flow off the bat. 

What does cash flow look like?

Solid cash flow right now is $100-200 per unit. Maybe $400 on a home run deal. 

Yes, this will seem low. You thought Indy was the Midwest “discount” market. Exactly, we are shifting. 

Let me ask this: what’s your alternative? 

Go to far-out Greenfield or Anderson, buy a $90,000 house, fix it up, and rent it out for $1200. Sure.

This is not a solid buy + hold investment though. You will not see great appreciation nor rent appreciation. 

Where to invest in Indy?

B class: SoBro, mid-Northside, Lawrence, Speedway area, Garfield Park. 

C class: East / South Fountain Square, Mapleton-Fall Creek, Community Heights, Emerson Heights, Bean Creek, Christian Park.

All of these areas are continuing to see very strong appreciation and commercial development. 

An example deal I did: 

• 2040 S Laurel St. 
• I bought this rental in Garfield Park (5 mins from downtown) for $80,000 from an off market lead.
• It was already rented for $800 / mo.
• When the tenant left, I turned it with some tasteful cosmetic updates: butcher block, new paint, etc. Then, we upped the rents to $945.
• This is cash flowing each month nicely. Easy. 

These deals are still around in Indy. 

What about rates?

Rates are temporary. You can always refinance for a relatively small feee. The current moment where buyers have slowed down won’t last. 

What happens when rates drop again? We will be back to multiple offer scenarios. 

We still haven’t gotten back to 2019 level of housing inventory. And there was a housing supply shortage even back then! In 2013 there were over 13,000 homes on the market in Indy, and in mid-2023 we have just over 4,000. Too low… This is what will continue to drive property and rent increase.

Key Takeaways for this Market:

• Indy is in the medium-sized city shift. There has been more investment in the past 4 years than the past 25 years combined!
• Cash flow is extremely difficult with higher rates rates.
• A rental property still makes sense, when you for the total yearly gain of a rental property  (including loan pay-down, appreciation, tax benefits). 
• Plan on property appreciation, rent appreciation, and a potential refinance later. In 2024, Indianapolis is expecting 3-5% appreciation as we still have historically low inventory.