Getting started in Long Distance Small Multi-family Investments

[Nicolas Bajner]

Hello Bigger Pockets!

I currently reside near Chicago Illinois. The market is currently not very forgiving for the type of properties I'm looking for. I'm looking for something similar to a 4 unit small multi-family rental property under $400,000 outside of war-zones where the property taxes aren't crippling the cash flow. Here in Chicago, if I look anywhere in Cook County, with the same parameters above, I might as well be looking for an invisible needle in a haystack the size of... Chicago. Surrounding counties have potential but still come up dry/properties get snagged before I can even read the "More info" tab.

My question is if I am looking into long distance real estate, where should I start to look? I understand some great markets are in Arizona, Florida, Texas, Oklahoma etc... but I don't know the areas well enough to decide "That's where I need to focus my attention and study". I'm currently reading some books that are helpful as to HOW to get everything started and even automated with time, but that still begs the question of WHERE to invest.

Where are you all having luck? I would prefer to start investing in markets that favor cash flow > appreciation at the moment. I would love to hear anyone's opinion on where and how you got started! Any and all information is appreciated!

Thank you for your time!

[Paul De Luca]

@Nicolas Bajner

Have you already looked for a 4-unit in Elgin, Aurora, Cicero, Berwyn, Little Village, and Chicago Heights? All areas worth considering. 

[Nicolas Bajner]

@Paul De Luca

Yes, I have. Either they are out of budget or the taxes are insane (at least from what Ive seen). I have been searching in Elgin, Aurora, and Berwyn but havent checked out Little Village, Cicero or Chicago Heights! Ill take a peek! I actually made an offer on a 4-unit in Elgin and was outbid. I was also under the impression Cicero may be difficult to rent out too/cash flow. If I'm mistaken I would love to take another look.

Thank you for the advice!

[Kristen L Garner]

Hi Nicolas, I know your struggle!  I reside in LA but invest in Indiana (my hometown).  I have found Indiana to be great for cash flow and it's your neighbor! It is also expanding at a rapid rate with tons of distribution centers and jobs popping up.  If you ever want to chat I'm an investor and a lender that specializes in working with investors, happy to help. -Kristen

[Man Le]

@Nicolas Bajner I'm an investor in Aurora and have been actively looking for multi family in Aurora and agreed with you, 4 plex around 400k is hard to come by these days, I haven't found anything so far, I meant nothing for a  4 plex, neither for 5,6 plex.... I saw 4 plex is contingent for $349,900, it's on the market for 34 days so I think they are out there, it's matter of time until the next one shows up.

Good luck for your adventure and I'd like to learn how long distance investment works also. 

[Nicolas Bajner]

@Kristen L Garner

I would love to talk about where youre investing! I never even thought about Indiana. Ive been too busy thinking about the states that the big names are going to that I never seriously considered the other 45. Minus Illinois... either way I would love to hear about how you got started and start delving into Indiana's market! I love studying new markets and learning about which areas to avoid and which areas are hot. 

[Nicolas Bajner]

@Man Le

Tell me about it. The market over here is crazy! I think I got lucky with the property that I found and, much like anyone on here, want to keep up the progress and exponential growth. Thats why I want to move to a 4-unit rental property. I wouldnt mind investing in a 5 or 6 unit property either. But the problem remains that there are 0 currently! I dont think I can sit around and wait for one to pop up while other markets are opening up. That's mainly why Im considering investing out of state. I need to keep up with my goals for my growth and Chicago is a bit too funky at the moment. Its either too expensive or the property is gone before it ever hit the MLS. I have my fingers crossed that you can find something too!

[Mike Kehoe]

@Nicolas Bajner I too live in Chicago and invest in North Carolina. DM me if you want to hear more about my experience.

[Nicholas L.]

@Nicolas Bajner what you're looking for is going to be hard to find anywhere.  I'd look within 2 hours of where you live to get started.  I would think that would be a pretty big market with millions of people in it.

Do you plan to occupy or will all units be rentals?

[Mary M.]

Do you have an agent working for you? in a hot market you need that intel to be able to succeed. Also, dont forget that even if you bought a local property that was negative cash flow - if rents increase over time your cash flow will increase. REI is a long game. and IMHO its better to invest where you know and where you can be eyes/hands on.....

[Jonathan Klemm]

@Nicolas Bajner -Sorry to hear the search is going great.  It is honestly tough out here for all of us.

I am going to be honest @Paul De Luca stole my thunder, he rattled off some great cash flow areas.

Not sure if this is your first upcoming deal or not, but I recommend putting slightly less attention on the numbers and just getting a deal under your belt.  If this is going to be a house hack even more of the reason to worry less about the cash flow....

Happy to connect and talk through some of your details more if you think that would help.