Investing in the 2021 market

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Investing in the 2021 market

Tim Sipowicz
Rental Property Investor · Lockport, IL · Member since 2019 · 169 posts · 37 votes

Hey everybody. Going to ask you to get our your crystal balls for this one but what do you think will be the best strategy for investing in 2021? I’m going to have about 50k in capital and searching for that first deal to be able to get in and keep scaling. I know that your first deal shouldn’t always be a home run but more so just to get into RE investing but I also want to take the best approach. I was more a buy and hold approach but I don’t know if that’s the best approach in today’s market and with homes being at the top end in the C neighborhoods I’ve been looking. Obviously I will continue to look in multiple markets but just wanted to get some opinions and maybe what other investors intend to do in the upcoming year. Thanks and look forward to the responses. 

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Canesha Edwards
Developer · Atlanta, GA · Member since 2014 · 475 posts · 424 votes
5y

@Tim Sipowicz

Sadly- no one has crystal ball, so what the market will do in the future is unknown. So, how do you prepare?

Determine your investment strategy. Are you looking to invest in single family or multi-family? Determine your property criteria, price range, and be patient. The key is not to deviate from your strategy.

Many people get impatient and will buy a property just to say they bought a property. Don’t be that person. Why? When the market does correct itself...you will be in a tight spot if you over paid for a property.

You could use the money to purchase a few small SFRs or make a down payment on a Multi-family. Not exactly familiar with your market, but there are good deals still out there. Just takes a little extra time to find them.

Feel free to reach out anytime. Always happy to help.

Best,

Canesha

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  • Reece Iovine
    Realtor · Columbus, OH · Member since 2016 · 170 posts · 227 votes
    5y

    You don't need a crystal ball to invest in long term buy and hold rental property. :D Buy in B-C neighborhoods with growing population and consistent diverse employment growth. With those 2 factors you will always have strong rental demand and rent growth, and appreciation and where those factors exist a C neighborhood will usually gentrify into a B over time with investor interest and government programs. 

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  • Tim Sipowicz
    OP
    Rental Property Investor · Lockport, IL · Member since 2019 · 169 posts · 37 votes
    5y

    @Reece Iovine awesome, thanks for the input. This next month or so while we are in the process of closing on our primary residence, will be dedicated to learning those aspects of the market and narrowing down a neighborhood to invest. Still learning how to analyze neighborhoods for growth and other factors.

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  • Reece Iovine
    Realtor · Columbus, OH · Member since 2016 · 170 posts · 227 votes
    5y

    @Tim Sipowicz a good investment realtor can help on grading neighborhoods. For over all market growth/trends look at the marcus and millichap reports or irr reports for your area...both free

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  • Tim Sipowicz
    OP
    Rental Property Investor · Lockport, IL · Member since 2019 · 169 posts · 37 votes
    5y

    @Reece Iovine will do, thank you.

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  • Jonathan KlemmBusiness Member
    Moderator
    Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes
    5y

    @Tim Sipowicz - Sounds like you are definitely on the right path.  Saving money and building capital is definitely the right move during this crazy time.  Foreclosures will be coming and those with capital ready to be deployed will be in the best position to scoop up all the deals over the next couple of years.

    With that said, there are still deals out there now they are just harder to find so you'll have to analyze more deals and make more offers, but you'll eventually land a good one.  

    Also, I think you mentioned hitting a home run for your first deal....that's the exact opposite approach I took and that I advise to newer investors.  Getting started is the hardest part about real estate investing so just look for a simple base hit.

    Where exactly are you looking in Chicago?  $50k can go along way in certain areas.  

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  • John Warren
    Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
    5y

    @Tim Sipowicz as you look for neighborhoods, I wouldn't obsess over job growth and population growth. Most of the neighborhoods I invest in are stable and are not growing or shrinking dramatically. These are more urban suburbs and there are also parts of the city that are just like this. I try to invest in neighborhoods where there is a Starbucks, Chipotle, Buffalow Wild Wings, etc. I am not looking for the A class neighborhoods, but I am happy to get the B and  C class stuff. That is where the cash flow and value are. 

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