It's great to be joining this community! I'm a CA investor looking to purchase buy-and-hold rentals out of state once or twice a year. I've been stalking the forums, podcasts, books, webinars, etc. for months now, and I've been eager to find the optimal market to get started in.
My research has led me to Champaign, Illinois because of good trends in income, job, and population growth, strong price-to-rent ratios, declining crime metrics, and homes that are in my price range.
I could definitely benefit from some "boots on the ground," and any advice from experts in the area would be welcomed. As well, I'd love to connect with an agent who has experience working with investors, or who invests themselves in the area, and hopefully build a strong connection. Hope we can talk soon!
Real Estate Broker · Apopka, FL · Member since 2017 · 492 posts · 528 votes
6y
@Myles Taccini welcome to Bigger Pockets! While I'm not in Illinois, I can tell you that you're in the right place searching for knowledge and professionals on this platform!
Once you make a few connections in the area, I suggest making a trip out there to scope out the area and meet the folks you'll be working with face to face. I have worked with out of state investors several times buying here in Central FL, many of whom make offers on property without being here at the time the listing pops up. The ones who have made a trip here to meet me, explore the areas of interest, meet property managers, and get a feel for the 'lay of the land' are far more comfortable pulling the trigger on making an offer when the perfect deal comes up days after they made it back home. You may not find the perfect deal when you're in town, but having set foot there and seen various neighborhoods goes a long way in interpreting listings and the market when you get back home and communicate with a Realtor by email discussing listings.
Investor · Iowa City, IA · Member since 2017 · 137 posts · 85 votes
6y
Hi Myles,
Welcome to BP. I was born and rasied in Champaign. My folks and siblings still live there. Great Big 10 town. I live in Iowa now, and most of our holdings are here, but we own about 10 houses in surrounding towns close to Champaign. My brother, J Leman, is a realtor and investor in the area. He is not on BP, but you can shoot him an email at leman47 (at) gmail or hit him up with a text: 2177785320.
He would have a good handle on the market. Whatever you do - Good luck!
Real Estate Broker · Apopka, FL · Member since 2017 · 492 posts · 528 votes
6y
@Myles Taccini welcome to Bigger Pockets! While I'm not in Illinois, I can tell you that you're in the right place searching for knowledge and professionals on this platform!
Once you make a few connections in the area, I suggest making a trip out there to scope out the area and meet the folks you'll be working with face to face. I have worked with out of state investors several times buying here in Central FL, many of whom make offers on property without being here at the time the listing pops up. The ones who have made a trip here to meet me, explore the areas of interest, meet property managers, and get a feel for the 'lay of the land' are far more comfortable pulling the trigger on making an offer when the perfect deal comes up days after they made it back home. You may not find the perfect deal when you're in town, but having set foot there and seen various neighborhoods goes a long way in interpreting listings and the market when you get back home and communicate with a Realtor by email discussing listings.
Welcome to BP! Champaign Urbana is a great community and the University is the main economic engine and #1 employer. Like most cities you do need to take care as there are good and bad areas of town. Also, specific to our community the number of new student housing projects has been cranking for the last 10 years and from my opinion out pacing the growth of the student population. Thus solid student rental properties 5-10 years back are now much harder to rent. Student housing is seeing rent pressures and driving many of the larger property managers to have to offer incentives to fill their units.
If you have any questions let me know and I will echo @AJ Leman comment as J Leman has always been a great ambassador to the University and the community.
Thanks so much @AJ Leman! I'll be in contact with him shortly.
Definitely open to making a trip, always a good idea to see the area in-person first. Thanks for the advice @Russell Holmes.
Ah, interesting insight @Scott Dixon. I saw reports of new student housing being built but didn't realize there was so much pressure on SFR investors now. I'll be sure to research that a bit more thoroughly.
Rental Property Investor · Champaign, IL · Member since 2015 · 146 posts · 80 votes
6y
Welcome! I'll be honest - though I live and invest here I wouldn't be eager to jump into the Champaign/Urbana market at the moment. While the market is strong at the moment, it is still in Illinois. I expect in the next 5-10 years (because of debt problems in the state, county, and local economies) for taxes to continue to increase. Champaign is overbuilt already, and more developments are still being approved. Eventually the economy will slow, rates will go down, rents will decline (as the new building vacancy rates increase forcing developers to lower their prices), and state/local taxes will continue their upward march. We currently enjoy a good/fair market, but I think there are many potential threats to be aware of.
If I were out of the area I would be looking at Indy and the collar counties there, and St. Louis and the collar counties there, particularly on the Missouri side. Happy to chat if you'd like, but thought I'd put my analysis out there.
Rental Property Investor · Champaign, IL · Member since 2015 · 146 posts · 80 votes
6y
I would also check out this article in conjunction with the one originally posted. If you combine the fact that last year was the biggest since 2007 (seems like a familiar year) and that 2020 is on pace to meet/exceed 2019 number in permits approved (also per City of Champaign's discussion of major funding needs here - see page 10 where they expect 20% growth in permit fees through 2023) I believer we're looking at a challenging few years/decades.
Real Estate Investor · Champaign, IL · Member since 2017 · 63 posts · 37 votes
6y
@Myles Taccini campus housing is being overbuilt here in Champaign, but I wouldn't want to compete there anyway. Private equity and building permits are getting approved as long as pass zoning, ordinance, etc. The city isn't in charge of "making business decisions" for developers, but they will approve any permits that pass zoning, etc getting more property taxes for them. Campus housing right now are trading 6-7 cap rates right now. The low cap rates maybe makes sense for 1031 exchange money or people looking to park money.
The first 5 I bought in Champaign area were all section 8 and have always been outside of campus town where you can find great rent to price ratios. Champaign county in IL is the only place in Illinois I'd invest due to property tax and political/financial situation for the state.
What cash on cash returns are you looking for? Sounds like you are wanting to be equity owner building portfolio. I am full time investor in area and can send you deals of solid yields that come up and seller finance deals that can connect you to see your interest. I have couple other out of state investors from California that are building portfolio here in Urbana and Champaign that can connect you anytime with property manager, home inspectors, lawyers, lenders, etc. Feel free to message me anytime. I usually schedule calls after 2pm preferably.
Biggerpockets is definitely the best place to find content and real people actually doing deals. Good luck either way!!