Hello from Elmhurst, IL

13 Replies

Hello everyone, I'm an Illinois newbie in this business, and I'm not sure how to introduce myself; I have a full-time job (mech. designer) that pays my current mortgage, and I'm determined to join your club. No savings, so I would finance the investment 100% (use my HELOC for downpayment + mortgage loan for the remaining balance). I want to generate monthly cash flow so I'm thinking buy and hold (rent).

 My problem is today I'm looking at Dallas - Fort Worth area, tomorrow at Nashville TN area, then Indianapolis, then I read some posts here and I move to Columbus, OH, or Atlanta, GA. Well, probably any of these places can be either good or bad choices, just need to get as much info as I can. Also, joined Roofstock family, as well as Homeunion, and I was convinced that SF homes would be the best option, but after spending some time on your forum, I think multiplex units are better for a first timer like myself.
I'm looking at 100-150K properties, I would like B zones, so if anybody can help me in any aspect of the process - I'm really interested in learning about the cities I mentioned here.
Thanks for taking the time to read this.

Hey @Adrian Cartis Welcome to the world of REI! I think you can invest anywhere if you can establish a great team that can assist you! Are you looking for multi-family or SFH?

Welcome!  I’m a Fort Worth Realtor and have a duplex as well as the current place we’re in which will be a rental come next year.  

This market is pretty quick right now. I can't think of any areas around me anyway where you could get a decent multi for under $200k. A rehab in a sketchy neighborhood, possibly, but for a first investment as an out of state landlord, I wouldn't recommend that route. SFH is more doable although you will definitely have to look for a bit and put in a lot of offers before finding one. Again, it'll probably need a bit of work. There are a lot of older but decently places around here like that, but all need some kind of work, at least the ones I've found.

Maybe an investor with some more experience can chime in and tell me what areas I’m forgetting (I’m looking for similar properties)!  Feel free to PM me for more info as well and welcome to BP!

@Adrian Cartis Welcome to BP! How has your search gone in the DFW area so far? I think finding multifamily properties in the 100-150k range that would be considered B properties is going to be  tough in the current DFW market. Let's assume you buy a duplex for 100-150k, then 1% rents would be $500-750 a side. B properties don't usually have that low of rents (because they cost more than 100-150k). So you might have to change your criteria a little. If you want to be in that price range, then go to the c- properties. If you really want to be in the B properties, raise your price range. To get a "deal" you will probably need to buy a property that is distressed and need some repairs. Do you have a way to fund the repairs? Since you're from Illinois, I assume you will be doing most of the transaction remotely, which means you won't be able to do much work yourself. There is nothing wrong with this, it just costs more. A single family home in a B neighborhood for 100-150k price range is probably more reasonable. However, same is true for the repairs.

Since you are just getting started with little capital but already have a house, have you considered house hacking? It is about as low risk as your can get. It will teach you about renting a property, how the numbers actually work (not just in ideal calculators), and put extra cash in your pocket. I understand this strategy isn't for everyone, so if that isn't an option the live-in flip method is also a good way to build up some more cash for investments. Plus you get to learn about the rehabbing side of the business. 

I hope some of this information is of value to you. If you have any more questions about the Ft. Worth area feel free to reach out. Good luck with whatever strategy you take! 

Originally posted by @Adrian Cartis :

Hello everyone, I'm an Illinois newbie in this business, and I'm not sure how to introduce myself; I have a full-time job (mech. designer) that pays my current mortgage, and I'm determined to join your club. No savings, so I would finance the investment 100% (use my HELOC for downpayment + mortgage loan for the remaining balance). I want to generate monthly cash flow so I'm thinking buy and hold (rent).

 My problem is today I'm looking at Dallas - Fort Worth area, tomorrow at Nashville TN area, then Indianapolis, then I read some posts here and I move to Columbus, OH, or Atlanta, GA. Well, probably any of these places can be either good or bad choices, just need to get as much info as I can. Also, joined Roofstock family, as well as Homeunion, and I was convinced that SF homes would be the best option, but after spending some time on your forum, I think multiplex units are better for a first timer like myself.
I'm looking at 100-150K properties, I would like B zones, so if anybody can help me in any aspect of the process - I'm really interested in learning about the cities I mentioned here.
Thanks for taking the time to read this.

 If you come to columbus ever please feel free to reach out 

1. Check out the Chicago Creative Investors Association run by Jane Garvey. They meet on Sunday evening in Lombard, IL.

2. Start close to home.  It is tempting to think of exotic locations when it is all a future goal. Managing from a distance is a learned skill. Start by managing closer to home.

3. Don't spend a fortune going to "Guru" seminars. The first evening it is always the same. "Tonight's homework. Go home and call all of your credit cars and ask them to lower your interest rate and raise your credit limit". That is so you can place the equivalent of a down payment up to a house on a credit card just to buy their course on Sunday afternoon. Beware of "Today Only". Unless you are terminal there is always tomorrow.

4. Do not incorporate or form an LLC until you have a business worth protecting. A good attorney can penetrate your bad actions 90% of the time.

5. Do not form a Nevada LLC if you are doing business in Illinois. Then you need to pay double fees for permission to do business in Illinois as a foreign entity and file an Illinois income tax return as well.

6. Read the book "Lawyers are Liars" by Mark J. Kohler before setting up a business entity.

7 Buy lots of insurance and then add a Commercial Liability Umbrella.

Hey @Adrian Cartis

Welcome to BP! 

I was in your shoes a few months back - I live in Denver, but wanted to invest somewhere else. I was having trouble picking a location and kept bouncing back and fourth from a select few places. 

The best advice I can give you is to narrow it down to 3 cities. Start networking and calling realtors and property managers in those areas, and make your decision based on who you feel can help you achieve your goals the best. I did this for a few weeks - called and talked to a lot of different people. I found an agent I love working with and that's how I decided to invest in Indianapolis. 

All of the markets you mentioned are great places to invest in, but it really comes down to the people you have out there. If you don't love and trust your team, you wont get very far in real estate investing. 

I highly recommend David Greene's book Long Distance Real Estate Investing. I read that book and then the idea of investing out of state didn't seem so scary any more. 

Another piece of advice, once you decide on a location, try to become an "expert" in that place. I am constantly trying to learn new things about Indy so that I understand the market. 

Good luck! And have fun! 


Hey @Adrian Cartis ! I work exclusively with investors here in the Nashville area. Let me know if I can help you out!

 Mark, thank you for your offer, yes, I'm going to need your help, as soon as I can find professional advice in regards to the financing process; I think my situation is a little more complicated, I'm still evaluating the situation myself, since my visits to local banks were not helpful.
I think there are some attractive opportunities in your area; there is hard money available, but since I'm looking for buy and hold properties, I think this option (1 year loan term) it way too risky for me.

If you need any help in the Indy Market, let me know!  I would love to help.  

I am originally from Illinois myself, but Indy has been my home for a better part of the last decade.  I can point you in the right direction here in the Hoosier state

Welcome aboard Adrian!

Hi Adrian! I am a local realtor in the Indianapolis market. My husband and I are also looking at getting into the world of REI. I'd be happy to help you out in any way I can but also know another Indy area realtor has reached out.

One thing I'd like to add that I learned recently from a well established investor, is that a lot of "traditional" banks are NOT always the best place to seek out financing. The recommendation was to seek out local/smaller banks or other mortgage specific companies to assist with financing. I hope this helps in some way. Best of luck!!! 

Christie 

Thanks Christie, I have not gathered enough information about Indy market, but I would appreciate if you can provide some deals to get a flavor of your city.

 I think the financing sources need to be evaluated per each investor situation; specifically, in my case, just received my letter of discharge from Ch.13 Bankruptcy in July,2018 - most of the banks won't probably waste their time with me. That's fine, I can blame the system and wait 3 more years or so, or I can use hard money to finance 85% of the purchase price + use available funds from my 401k to cover the downpayment. At least that's what I plan to do. 
And if I get 24 months interest only payment on the private money loan, 2 years from now I should be able to refinance the loan into a conventional one, given that I'm getting a good deal on my property. That's where you come in with your listing, preferably multifamily properties in B areas - maybe we can get some deals for less then 100K later this year, I think late November-December can be a good time.

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here