Bettendorf - Good Deals on MLS?

7 Replies

Question for Quad City area (Bettendorf, Davenport, Rock Island, Moline) investors - do you believe good deals can be found on the MLS and/or FSBO for a single family rental? I'm looking specifically in Bettendorf for a single family rental. I've started with MLS and FSBO. Haven't attempted other approaches at finding a deal, yet. I am patient and doing this on the side (not looking to launch a full-time real estate business).

Also, what is a realistic vacancy rate for a Bettendorf house? I've got my spreadsheet set-up to account for 10% vacancy.

Ideally, I'd like to find a fixer upper at a good price and utilize my dad's construction skills and QC network to rehab it into a nice rental.

Appreciate the time and guidance from more experienced investors.

MLS is tough in the QC. There are a lot of deals done off market with pocket listings, and wholesaling. QC FSBO would be a decent place as well but I've found over the years prices on here are typically higher than what an MLS may be at times. Not saying you can't find something on there but you for sure would have to be prepared to move quickly on something that popped up on there.

I have 2 single family properties which I purchased this last year in Bettendorf and I am currently actively pursuing a few right now as well that are off market deals. The 2 we purchased were both FSBOs but since my wife is an agent we do follow the MLS very closely and I have seen a few decent ones over the last few months. The challenge is that due to the desirability of property in Bettendorf you will pay retail and be competing with many others on these properties. To answer your question on vacancy rate for Bettendorf I would tell you that I personally use 3%, however I think price point and time of year play a HUGE factor into this. Both of my rentals are between $1300-$1350 per month. The first one we rented within 1 week of advertising after 40 calls and 16 showings in late April. The second one rented in 3 weeks after about 20 calls and 5 showings. From all of the phone calls we get when advertising I will tell you that $1300 is towards the higher end of what most of the people are looking for so we turn a lot of people away. Another huge factor is pets or no pets. Of the 40 calls on our first propert only 2 did not have pets. We do allow pets which gives us an advantage BUT it comes with its own risks as I am currently replacing carpet in the basement of one of these properties due to cat pee. Good luck in your search and feel free to reach out if I can share any more of my insight with you on the Bettendorf market.

One thing I should clarify to on vacancy rate is that remember finding your first tenant may take a little longer, but depending on terms of your lease you should have 30-60 days to find a tenant before your old tenant moves out. On the appraisal for my 2nd property the appraiser used a 2.5% vacancy rate for the property.

Just to add a little here, 2.5% - 3% means having the property being vacant for 1 month in total over 3 years (roughly). I would encourage you to run numbers being more cautious than this. That being said, I agree tenant turnover is less likely in Bettendorf than in other areas of the Quad Cities in my experience. Time of year can make a huge difference as @Shawn Faris mentioned.

@Michael Pease Thank you for the insight, how does one get a crack at the pocket listings and decent wholesale deals? I imagine networking, establishing oneself, and just being around and reputable helps... would this be something accessible for someone new, like myself?

@Shawn Faris Your post is incredibly helpful, thank you. How did you find the off market deals you are currently pursuing? Are the FSBO homes you purchased performing well given the rent you are pulling in? If I may ask, what are your criteria? I will message you, as well.

Thank you both for the vacancy #s. I was definitely being conservative in my estimate, so it's helpful to know I could still be conservative and save a few % when estimating.

@Allison Massey The one thing that I found with Bettendorf is that you end up paying near retail for anything that is truly for sale whether that be a sign in yard, FSBO site, or MLS. Unless it is drastically overpriced or something wrong (foundation/water issues/etc) they tend to sell quickly if advertised well. I am very happy with the purchases that I have made as both cash flow around $400 per month and 14% cash on cash return, but these are also on 30 year fixed mortgages (which are awesome btw). As we look to expand our portfolio we would really like to try to purchase a portion of a portfolio (multiple single family properties) which makes getting 30 year fixed mortgages a challenge so we have been working with a local bank but will have to utilize a 5 year balloon amortized over 20-25 years which definitely has a large impact on cash flow. Although I was able to pay slightly less than retail for the properties I purchased I feel like both were a result of poor advertising efforts on behalf of the seller. Moving forward as we look at expanding our portfolio over the next year my wife and I have put significant effort into focusing heavily on our target area within Bettendorf. Our prime focus was to find properties via driving that appeared to be somewhat neglected from the outside and then from there see if the owners are willing to sell. We also very closely watch for the investors trying to rent in the area with a sign in yard only. They tend to struggle to rent these properties not utilizing electronic resources (Facebook, Zillow, etc). The benefit that we have is that any marketing dollars we spend have the potential to benefit us as investors or for my wife's business as an agent. I'm guessing from your standpoint the "driving for dollars" aspect may be a challenge, so you will want to make sure that you have someone with boots on the ground who can help connect you with these kinds of opprtunities.

Shawn, you have a very smart strategy. The QC is a place you can do very well, but as I've always told people from outside the area...its best to partner your way in. There are just so many considerations one has to make and getting a GC is nearly impossible right now.

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