Cash is King! This is correct and using it smartly is even better, which I still think most Real Estate investors miss out on many opportunities for their cash. Investing in Indiana Real Estate can be different then investing in other states, especially the West coast and major US Cities. So here are 3 opportunities that I believe a cash investor could really do well if vetted and bought correctly.
- Suburban Redevelopment – We have watched this happen in Westfield Indiana as of more recently but look at every other suburb and its old houses being redeveloped. It provides a lower cost, new space for businesses and terrific cash flow if bought and remodeled correctly. Leveraging these once lease up can create a fantastic positive cash flow with low cash investment scenario. As a growing suburb the appreciation on these properties does well and typically holds its value as an owner/occupant investor over time.
- Mid level Rental Homes – Back to the suburbs of course but truth be told this is where the action is. There will always be a need for nice rental properties for families in good school districts. Buying homes that need paint and carpet are a fantastic way to use your cash to create a solid monthly income. I would focus on homes that would rent above $1,600/mo and I would avoid buying them on the open market. Lower end homes are easy to buy but your next buyer and tenants can make for a difficult property to manage. Have your agent create a direct to seller marketing campaign to avoid retail pricing and dual realtor commissions.
- Improved Land – It seems like as soon as a neighborhood is opened up with new custom lots it sells out quickly and prices climb. If you have the opportunity to buy a number of acres that are either on public utilities or has been approved for a neighborhood, these are great investment opportunities. Not that anyone wants you to be the developer but instead its a nice place to hold onto and offer for sale to homebuilders and developers for a nifty profit. A most difficult task of development is infrastructure like roads and utilities as well as the zoning and planning stages. Many times these neighborhoods do not happen for many reasons but get passed on through family members and eventually sold as land. Really pay attention to these as they get snatched up quickly on the open market. Again this is a great reason for a specialized broker to help.
I understand that all of these have some lever of risk and most of them are difficult to pull off. But with the right team and some focused effort you may be surprised at how much Real Estate is sitting out there undervalued and looking for a cash buyer to leverage the oversight. Always be sure to hire a Realtor that specializes (do your research) in that market or type of property and they will make your job a lot easier.
Curt has been in the Indianapolis Real Estate business for over 10 years and spent his first years learning all aspects of commercial management and brokerage. He has had great success in managing existing commercial projects and new retail and office developments. Curt specializes in building owner representation and purchases in the Westfield Indiana market as well throughout the Indianapolis Metro area. Curt is passionate about growing the local Westfield community and in his free time volunteers with Westfield Youth Assistance and raising 2 children with his wife Jennifer.