Indiana is a Midwest inland hold market where DSCR math wins on basis and expense honesty, not coastal appreciation narratives. Three county economies — Marion/Indianapolis, Allen/Fort Wayne, and Vanderburgh/Evansville — share statewide DSCR programs but demand different comp sets, rent tiers, and rehab scopes.
This 2026 guide maps where permanent debt clears, how 3.15% flat state income tax affects portfolio IRR, why inland insurance ($1,400–$2,400/yr) beats coastal underwriting, and when to exit bridge capital using the DSCR calculator. BRRRR corridor depth: Indianapolis BRRRR cash-flow guide.
Three Indiana hold economies — pick before you bid
Sophisticated operators do not treat Indiana as one statewide average. Each metro has a distinct DSCR posture:
| Metro / county | Basis (as-is SFR/duplex) | Rent (renovated) | Insurance ($260K dw) | DSCR posture |
|---|---|---|---|---|
| Marion / Indianapolis | $95K–$145K duplex; $180K–$240K SFR | $1,250–$1,550/side duplex; $1,650–$1,950 SFR | $1,500–$2,100/yr | BRRRR + ratio at 65%–72% LTV |
| Allen / Fort Wayne | $88K–$125K duplex; $105K–$140K SFR | $1,100–$1,350/side; $1,250–$1,450 SFR | $1,400–$1,900/yr | Strongest ratio at 72%–75% LTV |
| Vanderburgh / Evansville | $82K–$118K duplex; $95K–$130K SFR | $1,050–$1,350/side; $1,150–$1,375 SFR | $1,400–$2,000/yr | Cash-flow hold; slower appreciation |
Marion County rewards Fountain Square and Bates-Hendricks BRRRR operators who model duplex gross rent honestly. Allen County is duplex cash-flow at sub-$200K ARV. Vanderburgh ties to Ohio River industrial employment — Toyota supply chain, healthcare, and logistics — with the lowest basis of the three.
Inland insurance — the Indiana DSCR edge
Unlike Southeast coastal markets where wind and flood compress NOI $300–$500/mo, Indiana investors underwrite inland dwelling coverage:
- Marion County intown: $1,500–$2,100/yr on $260K–$280K post-rehab SFR or duplex
- Allen and Vanderburgh: $1,400–$1,900/yr on similar coverage bands
- Upper band ($2,100–$2,400/yr): older stock, higher replacement cost, or prior claims
At $1,800/yr vs a coastal $5,200/yr quote on identical $1,650/mo rent, Indiana gains ~$285/mo NOI — often the difference between 0.92 and 1.08 DSCR at 70% LTV. Quote insurance before hard money close, not at refi.
3.15% flat state income tax (portfolio IRR, not DSCR numerator)
Indiana applies a 3.15% flat state income tax on rental profit. DSCR underwriting uses pre-income-tax NOI — taxes, insurance, vacancy, and debt service in the ratio — but after-debt IRR must include state tax on positive cash flow.
On $18,000/yr net rental profit after debt service, Indiana state tax is ~$567/yr — modest vs coastal states but not zero. Compare to Florida 0% state income tax when stacking multi-state portfolios; compare favorably to higher flat-rate neighbors when basis is lower.
Indiana DSCR parameters (2026)
| Parameter | Typical range |
|---|---|
| Rates | High-7s to low-9s on 30-year investor fixed |
| LTV — cash-out | Up to 75% on stabilized non-owner-occupied |
| DSCR minimum | 1.0–1.25 |
| Property types | SFR, 2–4 unit, select small multifamily |
| Qualification | Property cash flow — not personal W-2 |
Bridge leg: hard money Indiana · fix and flip Indiana · Metro hubs: Indianapolis · Fort Wayne · Evansville.
Case file: Marion County — Fountain Square duplex BRRRR
The investable lane is 1920s–1940s side-by-side duplex stock in Fountain Square and Bates-Hendricks — not Hamilton County turnkey at 5%–6.5% gross cap unless you accept thinner ratio for corporate-tenant stability.
Typical value-add band: Acquisition $118K–$138K · Rehab $48K–$68K · Gross rent $2,700–$3,000/mo · ARV $210K–$245K
Worked example: Bates-Hendricks side-by-side
- Buy duplex: $124K as-is — one vacant side, knob-and-tube, dated HVAC
- Hard money 90% LTC, $54K rehab, 10.75% IO, close 8 business days via Indianapolis hard money
- Lease $1,375/side ($2,750/mo gross) — 12-month leases, deposits, payment proof
- Appraisal $218K stabilized
- Insurance $1,680/yr inland Marion
- NOI after 6% vacancy, taxes $285/mo, maintenance, 8% management: ~$1,720/mo effective
- DSCR refi 70% LTV ($152.6K loan @ 8.15%): debt ~$1,135/mo → DSCR ~1.19
Marion County electrical permit timelines on panel upgrades add 3–5 weeks — factor IO carry at 10.75% on $178K all-in (~$1,590/mo). Neighborhood depth: Near Eastside · Garfield Park.
Case file: Allen County — Fort Wayne duplex cash-flow
Fort Wayne trades Marion County velocity for sub-$180K ARV duplex math. Allen County comps are not interchangeable with Marion — a Bates-Hendricks ARV does not support a Waynedale DSCR appraisal.
Typical band: Buy $92K–$118K · Rehab $40K–$52K · Gross $2,200–$2,650/mo · ARV $168K–$192K
Worked example: Northside Fort Wayne duplex
- Buy side-by-side: $98K — both sides tenant-occupied month-to-month
- Rehab $44K — panels, HVAC one side, kitchens/baths
- Lease $1,225/side ($2,450/mo gross) at market
- Appraisal $178K
- Insurance $1,520/yr
- DSCR refi 74% LTV ($131.7K @ 7.95%): debt ~$965/mo; NOI ~$1,185/mo → DSCR ~1.23
Fort Wayne clears ratio at higher LTV because basis is lower — operators stack Allen County doors when Marion County deals require 62%–68% LTV to hit 1.0.
Case file: Vanderburgh County — Evansville Ohio River industrial hold
Evansville anchors southwest Indiana with Ohio River logistics, Toyota supply-chain employment, and Deaconess/Ascension healthcare — a cash-flow-first market with the lowest acquisition basis in the state.
Industrial employment supports stable tenant demand on 1960s ranch and duplex stock in Riverside, East Side, and North Side corridors — not appreciation speculation.
Worked example: East Side Evansville duplex BRRRR
- Buy duplex: $89K — vacant side, failing furnace
- Hard money 88% LTC, $41K rehab, 11% IO
- Lease $1,175/side ($2,350/mo gross)
- Appraisal $162K
- Insurance $1,440/yr
- DSCR refi 73% LTV ($118.3K @ 8.05%): debt ~$872/mo; NOI ~$1,055/mo → DSCR ~1.21
Evansville basis runs 15%–25% below Marion County on similar vintage stock — yield-on-cost beats velocity for sponsors who recycle capital through Indiana DSCR rather than chasing flip ARV compression.
Bridge capital → permanent DSCR workflow
Indiana investors commonly sequence:
- Win contract with hard money proof of funds (7–10 day close)
- Complete rehab draws — photos must match rent tier quoted at acquisition
- Execute 12-month lease on all units — deposits, two months payment proof
- Order appraisal with scope documentation and within-county comps
- Exit to DSCR or cash-out refi when ratio clears at target LTV
Bridge at 8.75%–13.5% IO only works if permanent debt is modeled before acquisition. Run stabilized NOI through the DSCR calculator — not Zillow rent potential.
Rent roll standards: Executed lease, deposits, payment history, post-rehab insurance dec page, Marion/Allen/Vanderburgh tax bills (homestead exemption does not apply to investment), scope photos matching achieved rent.
Hold vs flip — when DSCR wins
When resale spread after 8%–10% transaction costs and hard money carry falls below $12K–$18K net but stabilized rents support 1.0+ DSCR — execute BRRRR. Marion County Near Eastside deals hit this threshold often in 2026; Fort Wayne and Evansville hit it earlier because basis is lower.
| Signal | Action |
|---|---|
| Achieved duplex gross $2,400+ Marion | Run DSCR at 68%–72% LTV |
| Fort Wayne 1.2+ DSCR at 74% LTV | Extract equity, stack second Allen County door |
| Evansville flip ARV compression | Hold on Ohio River employment corridor |
| Insurance quote above $2,400/yr inland | Verify replacement cost; adjust NOI before refi |
| Cross-county ARV comp | Reject — Allen comps do not support Marion refi |
Resource hub links
- Indianapolis hard money — Marion County BRRRR, Fountain Square, Bates-Hendricks
- Fort Wayne hard money — Allen County duplex cash-flow
- Evansville hard money — Vanderburgh Ohio River industrial holds
- Indiana DSCR state hub — program terms and statewide parameters
- Indianapolis BRRRR guide — corridor-level acquisition and rehab
- DSCR calculator — model ratio before you bid
- BRRRR strategy guide — nationwide framework
Pre-Qualify for Indiana DSCR · DSCR calculator · (833) 264-7776
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