Investing in Peoria, IL

15 Replies

Hi all BP folks! 

I've been evaluating the RE market in Peoria, IL. In my opinion, population growth, job diversity, supply demand, and a few other markers are making me feel okay with investing in MFH in this market. 

However, one thing that was pronounced in my evaluation was the crime rate. 

I am an out of town investor so I would love to get a local investor's perspective on Peoria and directional advice would be great thx

Hi @Jesse Fernandez glad to hear of your interest in Peoria. Peoria is a city with its share of problems but my wife and I love it here and see the future as very promising. And yes, Caterpillar has decided to move its HQ and its 300 top execs to Chicago land area... but will leave behind a strong downtown presence and remain very active in the local economy here.  The bread and butter of Peoria is their exploding warehouse district with many rehabbed buildings and new businesses coming in.  Picture Peoria as a city that "gets it" now but didn't for a long time, that puts us farther behind more progressive cities in terms of green infrastructure and bike lanes etc. but moving in the right direction, and all that circles back around to your question on crime. Yes, Peoria has its share of crime but it is located in certain pockets of the city as to be expected. I think as development continues and your tax base increases you are able to reinvest in more community development and police officers, I think at that point it snowballs and continues to improve.  Best of luck! Feel free to dm me if you have any questions about specific areas. 

Cheers

Jesse 

hi @Account Closed I don't think I quite follow, can you expand more on "subject to and selling to tenant buyers". Are you referring to buying a rental property no cash down and renting it to tenants for healthy positive cash flow returns? Or are you referring to another strategy? 

I've found Peoria's surrounding areas to be quite robust for rentals.  District 150 schools which is pretty much all of Peoria except for a few pockets that feed into say Dunlap are not in good condition. They bring high taxes and subpar schooling.  The surrounding towns get all the people wanting to escape the Peoria conditions, and you can pick up houses at good pricing often without getting into highly impoverished or dangerous areas.

@ Brad Stegall, I agree Brad I'm very happy investing in Peoria, I don't currently own rentals but I'm in step 1 of soaking as much info as I can before I make the 1st buy hopefully soon.

I was curios about @jesse fernandez as he is out of town and looking into many markets, if you ever read this, it would be awesome to know what lead you to Peoria, what other markets did you analyzed and the bigger question, did you ever invest here, and if yes how did it go and if no where did you invest at?

Thank you all have a wonderful day

Hi Sri, I would say that since this post was done, the prices in the Peoria area dropped quite a bit. The houses in the 50k range probably have stayed the same, and they are rented by tenants mostly affected by Covid. I have heard good and bad stories on this. Mostly you hear the bad but Im sure there are many good ones. I particularly ended up moving from our primary home at that time and have been protected as it has attracted a good tenant and is in a decent school area. I will say that Peoria is not a market for house appreciation so you need to male sure you get a good price....I would say at a minimum 15% less than asking as the market here swings +/-15% in the ten years we have been here.

The good thing rent has been very stable and I would like to say that we are a very diverce town in blue/white colar mix.

The cons, there still only two major employers and anything affecting them will impact the rent market heavily. But a small sign of hope is that there are several start ups that are starting to gain big momentum as natural fiber welding, bump boxes and an automation company in Mortin Il that hopefully would bring more jobs and security tonthe area.

Also Rivian is close by and gearing up for production I would think it should affect positively in Morton area and maybe some of East Peoria/Peoria area but for sure the Bloomington/Normal area.

I would say in general its a good place to invest for buy and hold strategy. Bit taces are higher than other markets. If your exploring KC, Indianapolis, Memphis, yo might get a better profit there but will have a higher intro price to the market, in Peoria you will have a lower intro price but profit will be at least 2 to 5% less due to our higher taxes.

I hope this helps, let me know if you have more questions

Thank you much for the very detailed information and insight Eric. Much appreciated. 


2-pack listed for 17.5k with monthly rent of $975 is very attractive but at the same time very concerning looking at how these homes are being sold so unable to decide. 

I agree about Indianapolis, I am invested there and pretty happy about the stable tenants and the appreciation of the value. 

Yet to get into KC and Memphis, thank you for the info.

@Sri Nitta I'm in the same boat as you Sri. I'm very attracted to the low prices and cash flow / COC return in that area. I'm currently in contract on 10 units made up of a variety of MFH. I've tried getting into several other markets around the country but there's too much competition so after flying out there and doing my research, I'm taking a stab at the Peoria area. My strategy isn't based on appreciation whatsoever so if it does appreciate then great. If not, that's OK too. I have some California real estate to ride that appreciation wave. After lots and lots of research and sleepless nights over thinking my options, I've concluded that this is the best option for my situation. Your individual needs and wants might be different. Good luck!

P.S. one thing I've noticed about the taxes is that they can vary A LOT so keep that in mind when evaluating properties out there.