Newbie from the middle of a cornfield in IL

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Newbie from the middle of a cornfield in IL

Ryan B.
Investor · -, IL · Member since 2010 · 409 posts · 616 votes

Howdy y'all,

I have been reading the forums of this site non-stop for awhile now and figured I should finally dip my toes in the water.

My name is Ryan and I am a newbie to the real estate investment business. My wife and I bought a fixer upper house several years ago and I finally finished it January 2010. Due to the family growing, we wanted to move to a larger house in a smaller town. We decided to keep our little fixer upper and turn it into our first rental home. Our plan is to keep the house for about another year and then sell and capture all the sweat equity that I put into it. We are planning putting the profit into a 1031 and reinvesting into other rental properties.

We have a long term goal of someday me being able to quit my full time job and become a full time landlord. Our plan is to invest in lower middle class/blue collar rental properties that we will buy and hold.

I have to admit that I get a kick out of reading MikeOH's posts, and yes I did buy his book. It is really scary (just kidding) that I find myself with what sounds like the same attitude and mentality as Mike. Only problem is we are not allowed to conceal carry in IL (guess that is where the 2x4 in the truck comes in handy).

I don't know what else to really say, but I will take any advice/criticism that anyone has to offer. I am like a sponge and I want to absorb as much knoweldge as possible.

Thanks,

Ryan

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  • Account Closed
    Landlord · Seattle, WA · Member since 2010 · 3k+ posts · 1k+ votes
    16y

    Sounds like your off to a good start. Mike Oh has solid experience and is well worth listening to. You have probably read about the 50% rule and the 2% rule. You will find others here that also can provide sound advice.

    Happy investing and welcome to BP.

    0Reply
  • Dale Osborn
    Mobile Home Investor · Spanaway, WA · Member since 2008 · 1k+ posts · 578 votes
    16y

    Welcome aboard - Good Luck in all your inbvestments. We started with single family homes then moved into apartments as they were cheaper per unit and rents were about the same. Now we are into Mobile Home Parks and are fat dumb and happy in that position now. You will find the niche that works best for you. Never stop learning - you can learn plenty from the free spots without spending your investment funds on books and courses!

    0Reply
  • Mark N.A
    Real Estate Investor · North Carolina · Member since 2008 · 1k+ posts · 483 votes
    16y

    Ryan:

    The one problem with MikeOH is it's just SO DARN HARD to get an opinion out of him.....

    My question to you is: are you stuck in your Illinois cornfield or can you relocate? If you've been studying this site you've discovered that many of the more astute and successful RE investors move to where the best opportunities are.

    Best of luck and keep us posted on your adventures.

    0Reply
  • Ryan B.
    OP
    Investor · -, IL · Member since 2010 · 409 posts · 616 votes
    16y

    NC Mark,

    I have noticed that some people do move to where there is more opportunity, but we are pretty much grounded here in the middle of Illinois. I do know that this will somewhat limit the amount of good, cash flowing rentals that are available.

    We live about 30 minutes from a metropolitan area that includes approximately 150,000 people. My wife and I would both prefer our children to stay in our small town (population of 1900). The good thing is I have been keeping my eye on the available rental properties in the metro area, and there seem to be several available at all times that fall into the 50% rule. Yes, they are in areas of the town that I would not personally want to live in, but they are by no means war zones.

    Maybe once the kids are out of school (not for another 14 years) my wife and I may decide to move to a better area of the country for real estate investing, but for right now we really enjoy the small town life.

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  • Account Closed
    Real Estate Investor · Chicago, IL · Member since 2009 · 178 posts · 62 votes
    16y

    Hi Big Bubba - Greetings from the same state. Unfortunately it sometimes seems like Chicago, and everywhere else in IL are two different worlds. To be honest, I have very little knowledge of real estate outside the Chicagoland area, but it would be very interesting to learn! I have a huge interest in agriculture (spent time in finance) and have always dreamed of having a far and being self sustaining. However, thus far I was born in a huge city in China but now reside in a smaller but still huge city (Chicago). I am a city slicker - I love the country and the small town life but have never really experienced it in a prolong setting. Sometimes I think about whether it would have been cool to goto a college town for school instead of an urban uni.

    For us Illinoisians, I saw something today that says 70% of all foreclosures are in 10 states, and Illinois is one of them. I have seen lots of people do really well in Texas and Florida, etc, but I have always wondered what do people do with their lives when they move somewhere for a job. The truth is, in Illinois I think there is lots of opportunity. I don't know specifically of whats going on where you are at, but in Chicagoland there are tons and tons of foreclosures. I am willing to bet that most by a large amount are around the Chi. Nevertheless this economy we are in is a national problem, and if everyone is moving away to pursue deals in Texas that leaves more for us here in the Illinois. *wink* Nice to chat with you.

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  • Josh Harms
    Real Estate Investor · Centralia, IL · Member since 2010 · 24 posts · 3 votes
    16y

    Hello Ryan,

    Don't let anyone tell you that Illinois is not a good place to invest. I Lived in South Carolina for 10 years and made good money there in Real Estate. I will tell you this though I grew up in Illinois and I lost a lot of money in South Carolina and now I live in the Southern Illinois in the Cornfields and I have made more money here and have about 58 rental properties for the price of 2 homes in South Carolina. Don't tell our secrets in this great time in Illinois. Where are you located? We have a Real Estate investment club in Ofallan Il on Thursday. I like to meet other investors so if you are close would like to have lunch. Let me know if you have any questions.

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  • Christie Snapp
    Real Estate Investor · Indianapolis, IN · Member since 2009 · 120 posts · 13 votes
    16y

    While you are starting out, it is probably best (and easiest) to invest where you are. But there are plenty of opportunities to invest out-of-state without having to re-locate. The trick is to find people you can work with and trust, who are grounded in the market you want to invest in. I've seen many people out on the west coast who buy in the Midwest.

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  • Eric M.
    Flipper/Rehabber · Louisville, KY · Member since 2008 · 1k+ posts · 1k+ votes
    16y

    I love how he refers to the town of 150,000 as "the metro area".

    Good luck Bubba, fewer people, less competition for deals. You'll do fine.

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  • Ryan B.
    OP
    Investor · -, IL · Member since 2010 · 409 posts · 616 votes
    16y

    Eric,

    Hence the name Bubba. :D The "city" is actually only about 115,00, I was including all the surrounding towns within about 1/2 hour drive.

    The other investors in the area I have talked to are happy breaking even or making $50 on rentals after paying principle, interest and tax each month ($50 does not go far for maintenance, vacancy, actual money in your pocket, etc). That is perfectly fine with me, when they realize that there was never really any cashflow at the price they paid for the property, I will be more than happy to take it off their hands at a hefty discount.

    There is also a huge blue coller section of the town that has many properties that can be bought for cheap since they have been neglected. It does not seem like too many people here are willing to put the effort into fixing them up and turning them into great cashflowing rentals (just have to screen tenants real good).

    I have a 3/1 SFR in a rather "ritzy" suburb. Bought it real cheap as it needed work, had 5 people knock on the door before I was even done rehabbing and asking if they could rent it. I am planning on selling it within the next year (after current lease is up), hopefully will put about $20,000 in my pocket. Then onto the next project.

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