Champaign Urbana for buy and hold

[Minh Hoang]

Hi. After reading a bunch of books, I have finally decided to invest in real estate and to make my first purchase soon. As places around me are way out of my price range, I'm looking into investing out of state, and one of the places is Champaign - Urbana. There isn't really a good reason for this, it's just that I have 2 friends getting a PhD there.

I'm hoping to buy and hold SFHs and duplexes in a good location for $50k - $175k. I'm pre-approved with a local bank for a conventional loan, though I'm exploring more options just in case. If a good BRRRR deal comes up, I can also get a hard money loan. But, honestly, I'm not seeing any distressed properties on the MLS right now.

Though, I have some concerns:

- Where can I find a good crime data source for Urbana? I have been looking at Crime Mapping for Champaign, but the site doesn't have any data on the Urbana side.

- How much of a hassle are the annual fees and rental inspections for Urbana going to be?

[Shawn Q.]

Hey @Minh Hoang - welcome! I'm an investor in Champaign with 4 SFR rentals. Distressed deals do come up quite frequently. I would recommend signing up for the homepath and HUD alerts for the county. That seems to scrape the most info.

As for your other question I don't have direct experience but most of the folks I've talked to have said the permitting and inspections are a hassle. I've looked at quite a few Urbana deals and most often the taxes are the deal killer. If you have the same property in Champaign and Urbana the taxes in Urbana can be 2X the Champaign bill. On lower-cost properties like I own that can be significant. I think you'll have better luck if you limit to Champaign or Champaign county outside of Urbana city limits.

One other note - duplexes seem to be relatively scarce in the area and don't hit MLS very often. There are a few, but the majority seem to move in off-market deals in packages between investors instead of selling retail. With covid and state-wide eviction moratoriums however I think we'll see more product on the market soon and there seems to be an uptick of 2-4 unit listings so I would (and am) keep an eye in that space. My personal preference is to avoid converted SFH stock, though, and there's a lot of that in town. Just FYI.

In any case, good luck!