Matt Spear has personally invested in two things: real estate and sports. And for this Indianapolis-based broker, these two passions must be interconnected. After all, the real estate game in this sports-driven capital city has proven to be a slam dunk for its own portfolio.
Perhaps the love for sports explains the high value that Spear puts along with teamwork. As a real estate agent at LIV Indy, Spear helps buyers not only close contracts but also form fixed asset investment teams. In the growing Indianapolis market, Spear knows that intense team makes all the difference when it comes to losing in fierce competition.
Learn more about the Indianapolis investment market in Spear’s own language.
My real estate background
In 2015, I started presenting myself in real estate deals. Then in 2017, I got a license and set up a brokerage. Today, we mainly work with investors, although sometimes we will represent first-time homeowners who come to us through our property management network.
We work with dozens of shoppers each year and strive to provide a more boutique experience for our clients. We don’t play volume games, but instead try to focus on personalized services.
What makes the Indianapolis real estate market unique?
What many don’t realize is that indie is a growing technology hub. Zillow recently ranked Indie fourth among cities that have the potential to grow technology companies unnecessarily.
As the 16th largest city in America, it maintains a low cost of living with a strong job market. This is a healthy, growing rental market, especially in the Covid-1 post-landscape. Last year, we personally saw rent increases in the 10% + range for some of our submarkets such as Sobro and Butler Turkington.
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What kind of numbers can investors expect here?
Our clients are always looking for the famous BRRRR deal. As a team, we prefer B-class investments, and the average rent in our property management portfolio is about 1, 1,500 per month. If you remove some luxury exterior, we want to be on average $ 1,250 per month. We always want to hit the 1% rule (monthly rent divided by all costs).
Working backwards, that means we expect our clients to be around ,000 125,000 (including rehab costs) with rent at $ 1,250+ per month. This usually results in a cash flow after all costs from $ 200 to $ 300 per door with a cap rate in the 7-12% range.
What kind of rental demand are you currently experiencing?
We have seen portfolio growth of 5-12% year after year in rental demand. The properties that took a few weeks to rent last year were rented by the hour this year.
How competitive is the Indianapolis market now?
Indy is burning! At the moment, finding a good deal is difficult – but not impossible. There are deals if you know what you are looking for and can respond quickly.
There are fewer and fewer opportunities in the market (I have seen more than 60 offers in one house!), But there are plenty of wholesalers as Indy is a popular investment market that has wholesale opportunities with the right connection. This is where we come in: we help our buyers analyze those deals as well, and we are known to find ourselves in some off-market, wholesale opportunities.
We strive to be the core “team member” for our clients and provide the checks and balances needed to navigate such a competitive market.
What do you personally like Indy?
I love sports and people. I’m a huge Colts and Pacers fan. I went to Butler University, so please don’t mention Hayward Semi-Court …
But more importantly, Indy hosts the Indy 500 – one of the largest sporting events in the world every year. We also hosted the Super Bowl and the 2021 NCAA Tournament. In fact, the indie is home to the NCAA headquarters.
After all, the people here are kind, worldwide Midwesterners.
Which area are you most excited about?
My favorite neighborhoods are Sobro and Butler Turkington. Everything else is remote third. I own about 25 units in this neighborhood. I’ve used the same BRRRR model on almost all of them.
That said, Indy has a good market for any investor. Bean Creek or Stringtown / Howville is a great area for higher ROI, lower resource class rentals.
The Fishers and Caramel neighborhoods are ideal for A-class suburban investors. One of our clients had just completed a caramel rental project, and the numbers were bananas for a one-class property.
What kind of assets do you think investors should consider?
My experience was in single-family homes and in two- to four-unit spaces. So naturally, I’m going to be biased towards those features. However, I would recommend that clients have an open mind even if they have no prior idea.
Personally, I’m looking for shopping and hold duplexes near College Avenue, up to Broad Ripple, north of 38th Street. Renting through the roof in that area, and there is a window of opportunity to invest.
Which investment strategy is most successful in Indianapolis?
Indianapolis is a strong market with stable appreciation and solid fundamentals. Our state motto is, “a state that works” and the real estate market is no different. So the best strategy I can recommend is “Buy!”
I often hear people say, “I’ll just wait for the market to go down, then I’ll buy.” The real estate market is like the stock market, and I firmly believe that no one will try to give time to the market. Also, don’t back down from the BRRRR contract because you may have to leave $ 5,000 to $ 10,000 in the contract, especially when that money will earn 20% + cash on the cash return.
What is the employment scenario in Indianapolis?
Many of our tenants are urban professionals working in the healthcare, technology or service industries. The most notable employers are IU Health, St. Vincent Health, New Era Technology, Eli Lilly, and Roche Diagnostics. The largest building in Indianapolis is the Salesforce Tower. Salesforce alone employs 2,300 people, creating a pillar (literally and figuratively) for the growing technology community.
What kind of industry is going in or out of the area?
Technology is improving. The service industry is growing as a result of the Covid-1t tailspin. The manufacturing industry has struggled lately, partly because of the Covid-1 factors.
Can investors rely on you for post-closing referrals?
LIV Indy is a property management company as well as a real estate brokerage. For this reason, we at Indy have a wide range of connections: local handmen, general contractors, vendors, contractors, insurance agents and more. We can help investors decide who not to work with. If you are going to start or create a team in Indy, then LIV Indy should be your go-to asset.