My name is Inga and I've recently started researching and learning about investing in real estate. I moved to Champaign last year to attend and work my way through graduate school. My current goal in real estate is to find 1-2 properties a year to buy and hold. I'm primarily interested in small multifamily units and lease to own options. I found my way to BiggerPockets through researching information about multifamily units and house hacking by reading articles and watching YouTube videos.
I grew up around Champaign, IL and did my Bachelors/Masters degree at the University of Illinois as well.
In my opinion house hacking is the best way to get started in real estate. I had a 4 bedroom house next to campus where I rented out 2 bedrooms and did Airbnb with the other bedroom. The numbers work great in this market from a cash flow perspective.
Thank you for the response. House hacking definitely sounds like a viable option to get started. I never thought about incorporating Airbnb into the property, so I'll keep that in mind. The other strategy I'm considering is doing a BRRRR, since I can start out with a lower price. However, I'm still trying to find a good broker to help me locate foreclosures/REOs, and other properties.
Welcome to BP Inga. I am also an active real estate investor in Central Illinois with properties in Champaign, Urbana, Tuscola and Mattoon.
My wife and I started out buying a two-unit apartment house about 7 years ago with a similar goal... buying 1-2 small multifamilies per year to hold and pay off the mortgages to cash flow supplemental income. Life happened and we found ourselves not saving up the 20-25% down needed to get conventional financing to carry out this plan.
After learning more about the possibilities of creative financing, we've began to really ramp up our REI business and have accumulated 13 units over the last 18 or so months and I have the goal to get to 100 doors by then end of 2019. We've accumulated these new properties through one version or another of the BRRR strategy, but most recently by using commercial loans based on the after repair value. This has allowed us to "force appreciate" approximately 20% of the value of the property and get into deals with far less money out of pocket.
I have not had much luck yet with brokers bringing me deals in the Champaign/Urbana market that have enough value add opportunity to make this strategy work. I am sure they are out there, I just need to cultivate more relationships. Building your network is also going to be a great source for deals. I recommend attending both the Chambana Real Estate Investors Meetup and the Rental Property Investors Forum (both can be found on Meetup) to name a few.
Quentin makes a great point, house hacking is a outstanding way to get started if it fits into your lifestyle.
I wish you the best and I hope that we cross paths sometime.
Thank you, Nick. I'm glad to hear your business has been increasing the number of properties for your portfolio.
I've been browsing through available properties in parts of Champaign to gain a better idea of current prices and value. My main objective is to build a good team of people I can work with to find, purchase, and fix up properties.
I was able to find the information for those REI groups, and will try to attend meetings when I get the chance. It should be a great way to meet local investors, and learn how to get my foot in the door for house hacking, and use that as a portal to work towards BRRR.
Welcome to Bigger Pockets.
I wish I had done this when I was at UIUC. I have looked at properties in Chambana online and thought they might do okay for some moderate cash flow.
I personally only use local banks for relationship and long term outlook reasons. I think it makes the most sense to start building trust with someone local you can visit in person to clarify documents, etc.
I have looked at mortgage brokers for multi family deals like Old Capital Lending, but not for residential.
@Inga Fonder - My experience is similar to Quentin's. I've only used local banks for residential and commercial loans for many of the same reasons: developing a relationship with local institutions, ease of documentation and working through problems, local knowledge, etc... For residential loans, I recommend Nick Wilkins at BankChampaign. For commercial loans I recommend Gary Otto at Washington Savings in Mattoon (they'll lend in the Champaign area as well) and Dan Rock at BankChampaign.
I have reached out to a few local mortgage brokers but I haven't received very good response. My impression was that they weren't very interested in working with investors based on my very limited experience.
In my opinion, even if I pay a little bit higher rate, having somebody local that I can go in and talk to is more valuable. Once you get a couple deals in place with a local lender, it may only take a phone call to get pre-approved for the next deal, helping you get an offer in place fast and maybe beating out the next guy or gal.
@Dave Dash it isn't too late to invest in the area. There are plenty of turn-key providers and other investment opportunities (joint venture, partnerships, syndications) seeking capital in Chambana and the surrounding areas.
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