ROOTS DEAL SHEET (8.07)

If you own real estate in Indianapolis, or you are seriously running the numbers on your first door, this email was written for you.

Big week. Tyler and I closed on Washington Manor, a nine-unit building in Meridian Kessler—our biggest acquisition. Units average $1,037 a month. Three renew at $990 for years. That shouldn't exist in a neighborhood where you walk to Cafe Patachou, but the building was never updated.

The previous owner proved our thesis. He renovated one unit for $18,600—cosmetics only, no structural work. Kitchen, bath, fixtures, hardwoods. He leased it at $1,450. That's $413 more per month. Roughly 27% annual return on renovation spend. He left us the invoice. Eight more units to go.

The catch: 1920s knob-and-tube wiring behind every wall. Insurance gets expensive in six months if we don't rewire.

Here's what matters: we're not pushing anybody out. There's nothing else in Kessler at $990—that play is both cold and stupid. We're fixing common areas first—laundry, storage, basement. Tenants see improvement before anyone moves. Then people move into finished units inside the same building while we work.

You'll see all of it next year: the rewire, the numbers, what we get wrong. Reply if you want in on the next one. We'd rather build with readers than strangers.

Now let's get you some doors.

A PULSE ON INDY
Where the Indianapolis market actually sits right now.

Source: MIBOR Indianapolis Board of Realtors, June 2026. Redfin Data Center, May 2026.

Six months of supply is a balanced market. We are at 1.9. That is the whole story in one number, and it is why a decent house here is gone in eighteen days.

On rates: the 30 year fixed sits at 6.66%, up four straight weeks. The Fed held, but three governors voted to hike. Nobody is getting a better rate by waiting for one.

THE DEALS
Eight live on the board right now. Five of them came from one seller and hit the market inside the same week, which is why the east side suddenly looks busy.

(Everything below was active when we wrote it. Several are vacant, days-old listings, so they move)

Check them out 👇

THE ONE WITH LEASES IN PLACE

Two doors, both occupied. And I am going to tell you something about this one that a listing agent normally would not.

The MLS says it grosses $1,420 a month. The seller's own rent roll says the base rents are $655 and $645, so $1,300, and the other $120 is the two tenants each paying $60 toward a water and sewer bill the owner pays. That is real money arriving every month, but it is not rent, and it does not stay in your pocket.

Underwrite it at $1,420 and forget to charge the water bill and it looks like 5.8% cash on cash. Underwrite it honestly and it is roughly breakeven, somewhere around $25 to $55 a month depending on what the water actually runs.

So why is it the first thing on this list? Because the leases are real and I can show them to you: Unit 41 is locked through August 2027 at $715, Unit 43 through February 2027 at $705. Both sides sit well under market on a settled Irvington street, the tax bill is the true non homestead figure with no surprise in it, and you are buying two occupied doors for $135,000. You are buying the basis and the gap, not this year's yield.

If somebody shows you 5.8% on this building, ask them what they did with the water bill.

THE PROJECTS

Three worth your time. On a strict 70% of ARV minus rehab, the math is tight on the first two—they work if you are doing the labor, living in it, or holding it. Applegate is already above the 70% line. ARVs below are our estimate off the block's renovated comps, not an appraisal.

A renovation somebody started and never finished, so you inherit the head start and still pick the finishes. Corner lot, big driveway, detached two car garage. Our ARV estimate is $220,000, which leaves about $9,000 of room against the 70% rule. Tight. The thing the spreadsheet misses: it is minutes from the Speedway, and race season short term rental demand is real at a price point that almost never gets access to it.

Solid mechanicals, which is the expensive part already handled. Another unfinished renovation, plus a recent trash out and fresh landscaping so it walks clean. Blocks from Garfield Park, under a mile from Fountain Square. Our ARV estimate is $250,000, and at $179,900 that puts it about $4,900 above the 70% line before you spend a dollar. There is a known sewer issue. This is a house hack or a hold, not a flip. Sold as is, seller will make no repairs.

This is a classic BRRRR frame—a foundation issue that scared off most buyers, but we have the quote in hand and a clear path forward. The owner paid $250,000 in 2023 and fell into the rent-by-the-room trap with a terrible remote manager. We are pulling it back to market-rate units and fixing the real problem.

We estimate $275,000 to $280,000 ARV with $25,000 to $35,000 in foundation wall repairs (quote approved) plus cosmetics. Kevin is running the project. Near Community East Hospital in a thriving B to B- neighborhood with strong renter and owner-occupant demand. The cosmetics are real but the structure is fixable.

TWO MORE ON THE BOARD
Both of these we found on the open market this week.

The cleanest cash flow story on the open market this week, and a much newer building than anything above. Both sides rented: $1,450 and $1,200, so $2,650 a month, which is a hair over the 1% rule at the asking price. New flooring both units, new HVAC on the 202 side. The $1,200 side is the obvious lever at renewal.

Now the catch, and it is the whole deal. The current tax bill is $907, which is 0.34% of the price. That is a homestead depressed number and it resets when a non owner occupant buys. Run it at the 2% Indiana floor and you get +$225 a month and 3.97%.** Run it at the current bill and you get 10.41%. That is a $367 a month spread, so the reassessment is the only number that matters here. Brooklyn is Morgan County, not Marion. Pull the county's actual behavior before you write, and do not underwrite the 10.41%.

The cheapest door on our board. Small, sold as is, and the photo is honest about the condition. But it is $83,000, minutes from downtown and Irvington, taxes of $1,001, and if you have been waiting for an entry point that does not require a partner, this is what one looks like.

ALL SEVEN, RUN SIDE BY SIDE

Every live property, the rent reconciliation above in full, the 70% rule math on each project, and the honest verdict on the one that has sat 226 days. Including the parts that do not look good.

READER LISTING

New thing we are trying. A woman named Anjellica found us on TikTok, messaged our office, joined our newsletter, and asked if we would put her house in front of you. She is not a client and it is not our listing. We just loved that she asked.

915 E Pleasant Run Parkway South Drive · Bates Hendricks · $370,000
4 bed / 3 full bath · 1,783 sq ft · built 1910

Sits directly on the Pleasant Run Trail. Two ensuite bedrooms, a dedicated home office, recently renovated kitchen, fenced yard, no HOA. Walking distance to Fountain Square and Garfield Park.

Straight with you, because that is the deal we make here: this one is a home, not a rental. At $370,000 the numbers do not work as an investment once the taxes reset to investor rates, and I am not going to pretend otherwise. But if you or somebody you know wants to live on the trail with two ensuites and an office, the sellers are motivated and offering up to $5,000 toward closing costs or a rate buydown.

Listed by Cody Jenkins at Cedar Tree Realtors. Reply and we will connect you.

Got something you want in front of this list? Reply. We look at everything.

YOUR BASEMENT AFTER TWO INCHES OF RAIN

Indianapolis just logged its fourth wettest August opening on record. Four to five inches in some spots on Saturday.

Your house ran a free diagnostic on itself last weekend and you probably were not watching. We wrote up the ten minute walkthrough: what to check, what each finding actually costs, and when you need an engineer instead of a waterproofing salesman.

Read the walkthrough →

Verified deep link, fetched 8/5, returns 200. The slug does not match the headline, so do not "fix" it, and do not link the blog index.

Also still available: the 17 door portfolio, one owner, all east and near north Indianapolis. Selling together or breaking it up. The full breakdown is here.

That is the week, Roots Fam. Seven live on the board, a duplex whose rent roll does not match its listing, and a nine unit we are going to document all the way down to the studs.

Reply to anything in here. We read every one.

Plant roots, build wealth.
Max

P.S. I said we would document Washington Manor honestly, so here is the first honest thing. The building is full of 1920s knob and tube wiring, we have six months to replace all of it, and the plan is to fish new wire through the walls without tearing the plaster apart. Everyone I describe this to makes a face. I will let you know how it goes. Probably badly, at first.