The BEST and WORST Real Estate Strategies in Indianapolis

Welcome back to the Roots podcast. I'm Max Moore joined by my co-host Tyler Lingal and today we're going to jump into the most overrated and underrated investments in Indianapolis. Stay tuned to the end. Please like and subscribe and let's jump in. Tyler, what is the most overrated investment in Indianapolis? Um, what I'm going to go with right now is rent by the room done out of state with a remote property manager. Ouch. Yeah. Uh, I I talked to somebody last week. Manager was from Florida. They they know that the manager is from Florida. They have a sevenbedroom home near a college campus. And I was like, "Huh? How How does that work?" Who has a stake in caring about the upkeep of the property? Property. Nobody, right? Nobody. Not a tenant. They don't care, right? Why would they? I have a wave of these properties being listed that I feel terrible. I sold them to the investor back in 2022 when rates were low, right? And this company, I'm not going to name their names, but they're out of business now. They're like, they were a professional scam artists. I mean, they promised 12% cash on cash return, yada yada. They never got more than three or four of the bedrooms rented. The company itself went under. They sold all the units to a new manager and didn't keep up with any maintenance. Landscaped, overgrown, you know, just disgusting inside. You don't know who's living in there. They don't know each other. It's just awkward. Number one, I don't think it's the way people should live anyways. Like get a studio apartment. Yeah. If somebody's going to rent by the room, you think it's going to be like a like one person's on the lease and they're subleting to some friends, roommate situation, right? The asterric that I will like put heavy emphas emphasis on is like with somebody operating it who doesn't care is is huge. Uh kind of my start was watching my parents do rent by the bedroom with my brother being the like uh glue that held the homes together. like he would live in it for a semester, move on to the next one and get them started. So, there was some community in the house, right? It's almost like like a a shared work space or um some sort of co-working situation. It's co-l livingiving is what it is. So, you have to have that community built in. Um why do you think people are forcing that square peg into a round hole? I think it was the whole idea of there's all these single family homes and limited multif family. Let's convert this $250,000 single family home to a multifamily experiment. Experiment failed. Move on. What about you? Most overrated. I if I hear burr, I might just keel over. It's It's rough because it doesn't work even for the guy that's doing it himself. Like the person that's in the homes laying flooring on the weekend, that is the only person that maybe possibly will bur. And those types of investors are working off of a heliloc and they're not going to refi for six, seven, eight months. Like they're not in in a pressure situation. If you don't have money to invest, save money to invest. There's no cheat code. Everybody's trying to take a shortcut. It's an investment. Yeah, there's principle. And and there was a wave that everybody could be a little boat out there and let all the, you know, let the tide rise all all boats. whatever the saying is that Dave Ramsey says all the time that comes off the tongue. Uh, they got to ride the wave. We're not Ramsey folks. It's just Max and Tyler stumbling over our words. But you you just got to ride the wave from 2016 to to now where you you could do that, right? It doesn't We sat with David Green for an hour or two in Austin, Texas early this year. The guy that wrote the book said it doesn't work anymore. Right. He's like, I wish I never let him go because it wasn't profitable. Right now he's like figuring out what he's going to do. He's getting into faith and stuff. Yeah, he's gone through a whole life pivot, right? Uh I'm reading his pillars to uh three pillars to wealth, whatever that book is, the most recent that he he wrote. And not once in there does it mention value ad properties. Buy turnkey, use this to diversify assets and stop trying to live off of your rentals when it's number one. It doesn't Nobody is winning in that strategy, right? I I I will say gentle push back on the I don't think I think certain people can buy value ads and do very well. The person with the heliloc that lives in the city that they're going and swinging the hammer. Right. Right. Someone a full-time gig. Right. Right. There are people that can drive wealth and do very well with that. Right. Uh however, uh the vast majority of people probably should be looking for a more passive investment. I agree. So yeah, and and that I guess that that would be the heavy abstract. I'm talking about the person that does not want to ever walk in right past the threshold of the home that they own. They want to acquire a large portfolio. There are more better more better ways to do that in 2025. Like go after somebody that has a portfolio of section 8 rentals that they're trying to exit out of. We've got plenty of those that you could seller finance and sneak your way into with some like sub two situations. That's going to favor better than going and buying a 100k home and putting 50 into it to refi it for 225 to rent it for 1,500. That doesn't even exist. That deal doesn't even exist. And that would be the numbers you would need. And that doesn't cash flow either. No. So just I'm just saving you the time. It it's not in Indie. It's not here. Uh India is is most prepped for the what I think the underrated investments, which is what what's yours? What's the number one most underrated investment? This is a This is going to be one that might ruffle some feathers here. Um, some people might disagree with me. If you can do it, this is like 10% of people, maybe 2% of people, who tales are people that uh can basically is what are you doing? You're taking a distressed seller's property. You're cleaning it out. You're doing the bare minimum to make it look like a turnkey flip. that's like now a thing like, "Hey, this is ready to flip." Uh Ryan Ryan Boyd, I just saw him do this. He kind of did it for a seller. He was documenting on Instagram, but I'm looking at this house that probably would have sold for like 40k cheaper. And I think the dude had had them spend like 10k, right? And it looks immaculate. He was like putting the before and after pictures. They'll spend like 5k to clean it out and make 20k. Yeah. It's a great investment. But everyone's going to hear me and be like, "All right, Tyler, how do I go wholesale properties?" and they're going to like get a cold caller from Pakistan and get no properties and waste 10 grand on doing this. It's like no actually don't do that. This is again like for really this is for professional investors in my opinion. Yeah. People like Nick Giuliani that have like a team a professional investor you should be investing with a professional investor. Correct. Like we are going to continually harp on that again. Right? Like the consumption of media, books and knowledge that we have had in our short investment lifetime all has led us to the belief that if your returns are far better and betting on a horse than betting on a house. Mhm. Like go out and find your horse that's going to go in for you. This is for the the agents that watch us. The next time you're in a listing appointment and you're looking at brown cabinets, offer them a price to buy the home. Hey, here's what we'll list it for. Here's what you could do to get to this listing price. And if you don't want to deal with the headache here, here's how much I'll buy it for tomorrow. Go do the work. List it. That's the win. Right. And we didn't even define wholesale, but not at all. I mean, it's it's buying something that is essentially marketable. Yeah. And doesn't need your flippable property. That's what it is. It's a service and the market pays really well for it because it's a in demand service. And you're you're executing on the actual purchase. You're owning the home. You're not it's not wholesaling. Yeah. Yeah. I want to I want to slide one more in there, which is the new group duplexes. Yeah. I Okay. So, and the reason I'll say this is cuz I had um I had some issues um early on with like the toilet paper holder was falling off and there was like some holes where the foundation posts were. And so, I'm like, let's test out this warranty. Maybe they these guys won't give a [ __ ] and they'll just like leave me to dry. No, they sent someone out there and they did five or six things that were like small things. Mhm. cosmetically. Well, they would have been big and that's right. Yeah, they would have been big over time. They did those things for me. And so the the true like maintenancefree investment, it's pretty much here. I mean, if if this continues the way it's going, it's like, wow. It's just rents and then your fixed expenses. I mean, the maintenance is like almost wiped away. Yeah. It's incredible. I this week's newsletter that is not out yet. It's about to come out. Uh, I did a section 8 comparison to New Group, what's actually better to own on paper in 5 years. And I'll have uh we'll we'll put that edition in the link below so you can read through and find the result. I was I was shocked. I was shocked and I'm not going to say which one it was. I got to go read it below. Yeah. Yeah. I will favor in the uh underrated investment being NTR done well. I think New Group can be a part of that. Uh update on the client that I've been talking about throughout time that he's not actually just he doesn't just have one nurse. I didn't realize he has three in the place that he's mtring. He's got three different people on contract. The that's netting. He lives there, by the way. Right by the room. Yeah. He's house hacking. He's house hacking upstairs. do that if you don't live very close to the property or in the property. The difference I guess the MTR done well it's done well by him because he's there and he can do it if not like he's getting close to four grand on that bottom unit. That is wild. Just straight cash flow. He could be getting I think 27 plus 2700 plus if it was just one. We'll have to return do this cuz I'm about to go to my mom's storage container to pick up some old furniture. Let's go. that she would just sell, you know, on Facebook Marketplace. I'm gonna take it, furnish it, and uh see how it goes. So, I'm I'm I'd be happy with 2500, but we're really going to shoot for like more like 3,000 for one side. Uh and then do long-term rental. We're going to AB test it out. So, I'll keep people updated on how my New Group duplex. And if you don't know what New Group, it's not NEW, it's NEU, which is the founder, Ed New, but we've done a whole podcast on that. People can go find on our channel. Yeah. I think uh to to call back to the midterm rental side of things, the difference between done well and done poorly is in the furnishings number one, in the photos number two, and in the location number three. You can't go and buy a property uh where a a like think of the demographic of who's going to be living there. Mhm. They are a uh it's a nurse. Mhm. Who might be working nights, might be working days, is traveling from an unfamiliar or traveling to an unfamiliar city. If they roll up and their first gut says, "Get the heck out of dodge." It's not going to favor well. So, when you're going to showings, think of it in that perspective. Maybe drive up around times that they would arrive like evening time. See what that looks like cuz that's when they're going to be there if they work days, right? Working 12-hour days and, you know, maybe have a couple days off. They need they need that security. And another thing to point out there too is they love two bedrooms units, uh, which are a little harder to rent as long-term rental, but find a 21 cheap, which is easy in Indie. Yeah. You can cash flow well, right? Very well. Yeah. And I think that there's some sneaky streets that you can break into and you can you can get the furnishing done. So, you just have to I think that long-term property managers, if you talk to them, they actually don't care to manage these. what they get frustrated over is having to furnish them, right? So, find a professional that'll furnish it. If you got referrals, hit us up. Y uh the second one that I will slide in is an opportunity zone in the uh 350K to 750K range. Something that I'm always watching in indie. You have to think like a decade ago, this range didn't exist, right? 350 was the cap. Maybe two decades ago now, but 350 was the cap. That was expensive in the city. just watching that uh luxury rental market. I think we're ranked like number one right now for the most growth in the luxury space, right? And that luxury space is from $350,000 to 750K luxury, right? That's what right for everybody watching everywhere else like even if it does not cash flow per per se, the equity growth is not even measurable. When rates drop right, they're a million. Snap to the moon. Snap your fingers. So, I think somebody that is okay to understand the long-term play of appreciation should be buying in that opportunity zone. So, and when you say opportunity zone, you don't mean the legitimate opportunity zone, which is like the capex uh deferred capex. No, I'm just or deferred capital gains tax. Are you talking about like opportunity zone and just medium price point? Yeah, that's a opportunity to be in that that upper end. Uh and what are these renting out for? You buy a 400k Yeah. super nice home, near east side, wherever. What do you think that rents out for? Yeah. I mean, I've seen Are you furnishing it? 400 to $450,000 houses in uh Fountain Square renting for 3700 plus. Yeah. Right now, like and and that's that's better than the mortgage payment. You can at least break even on them. Yeah. Yeah, but it's not the reason why like you're not buying it for Well, think about who's renting that is like someone wealthy after, right? Like they're not going to bug you. I mean, yeah, they may have they always say there's more neediness, right? Especially if you're going to caramel. It's the caramel effect. Like if you have a caramel rental, yeah, they're going to they're going to expect the world. Yeah. In Fountain Square, it might be a little better. But it's the house is going to provide already and they're in the location. You you would hope that it's different than the section 8 tenant. Yeah, I would I would at least they're going to pay on time too at least. So, yeah, I have not talked to many investors doing this strategy. If you are one, hit me up. I want to know how this is going. Uh our mentor is doing it all the time. He's buying tuxedo uh park super nice homes for 250 300. That's how expensive they are for nice, you know, three bed, three bath, whatever. Brand new, everything. Uh and renting them for 3,000 a month. Yeah. And by the way, he's getting them like way under the list price because he's just writing offers and like, "Okay, call me back in 30 days." He's about to write 30 offers once Halloween passes, right, immediately because that's when everyone gets nervous. Yeah. And they panic. Get greedy when others are fearful. Yeah. It's coming soon. I think that's a great way episode. Get get greedy when How did you just say that? Get greedy. No, no, be greedy when others are fearful. be fearful when others are greedy. So when others are fearful, that is always when the largest gains are in the stock market. Same thing in the real estate market. You just it's harder to see it cuz it's so localized. But that's after Halloween in Indie. Yeah. Hit the cycle in Indie and go bite off a couple $350,000 properties with a roots agent. Schedule a call down below. Please like and subscribe. Peace.