Advice on Buying in Lansing Illinois
I am an investor in NW Indiana and I know that market pretty much. However, I recently stumbled upon a 6-unit building right across the border, in Lansing, Illinois. Sellers are mom & pop type, friends of friends, ready to retire and go back to their homeland in Europe. They've kept the property in pretty good shape, based on what I saw.
Anyway, I think I can get it for $430k and they would be willing to do seller financing with a 3-5 year balloon and favorable terms.
Current Rents are under market, approximately $800-$900 per 2b+1 unit. I would describe the area as B- and based on what I've found through Zillow the expected rent should be $1,100 per unit. So, there is a nice value add right there.
Expenses:
Tax: $20k (based on 2022 assessment of $290k)
Insurance: $3,000
Water: $1,400
Common Power: $900
Garbage: $900
Lawn: $1,200
Repairs: $4,000
PM: myself, (or, to put a price tag of 6% Revenue - $4,300)
Based on the numbers, I will have a decent CoC return of 15% and Total annual ROI of 20% at the first year of stabilization. It looks enticing in this market, doesn't it?
Here are my questions:
1. How particularly hard is property management in Lansing, IL? Does anyone have first-hand experience in stabilizing MF properties in this area?
2. When can I expect the next tax hike? On the Cook County assessor site it says that the next re-assessment is scheduled for 2023. If they reassess the property based on the sale price I can expect tax to be close to $30k, almost half of my Income?! How does it make sense for anyone to invest in Cook County then? Am I missing something?
Thanks for your insight in advance.