Chicago vs the world: Forgone opportunities?

Question

I've been investing in Chicago for almost 15 years.  I've been incredibly lucky with tenants, turnover, properties, appreciation, connections etc.

That said I do occasionally find myself wondering, what if....If I had bought in Florida or Texas or a booming college town.  Would slow and steady be replaced with meteoric?

Am I suffering from greener grass syndrome, or should I have "Lived where I want to live and invested where the money made sense."? What do you think the best "markets that got away" are?

Brie Schmidt · Answer

I agree with @John Warren I started in Chicago and expanded to Milwaukee cause the returns were better.  They were but the headaches were not worth it, I sold almost all my properties there and wish I would have spent that money in Chicago.

Max Ferguson · Answer

Idealizing a past scenario is purely negative. Maybe there is something to learn, but most of the time it just makes you feel bad.

Everyone does it differently and you can't feel bad about it! Just as much as you compare yourself to others that got lucky (literally, they could have lost their butts too) with better investments/markets, you also need to consider the folks that never invested, live paycheck to paycheck, etc...

Markets that got away for me: Frisco/breckenridge/summit county (Never could have bought there anyway, just hurts I probably won't be able to)

Denver/Co springs: Own one here, but from 2018-2022 a lot of values doubled, I purchased january 2022. While it is an amazing investment, we got really lucky to snag one of the last viable duplexes

Omaha, NE: Went to college here. left in December 2020, wish I would've bought a duplex before they pushed up 100-200k on average.

Tampa is another one but I was never really close to being able to touch anything there before huge appreciation.

We will find others! And some markets that were overinflated will fall as well!

Marcus Auerbach · Answer

The grass just looks greener. OOS investing is much harder than you think, very few people have succeeded at scale, usually it fizzles out. I tell every Chicago investor who calls me about Milwaukee to stay in Chicago - the economic delta is just not big enough to take on the remote cost and efficiency burden. If you live in Seattle, San Francisco or Bosten it may be worth considering, because the difference is so large.

Henry Clark · Answer

Local is always better.

Dan H. · Answer

For me it is not the markets i did not invest in as much as the properties i did not purchase.  I lost one once that projected great return because i requested an estoppel before accepting the offer.  Another offer came in and was accepted.  I have lost properties for a few $k that were projecting return hat would have done outstanding even if my offer was noticeably higher.  back then, it was not whether you would make a lot of money as mych as if there was a different purchase that would produce a better return.  I should have bought all of them 😀.  I sort of believed that RE would always have plenty of opportunities.

Good luck

Caleb Brown · Answer

Old saying is "comparison is the thief of joy". Everywhere has seen huge jumps, sure areas like FL, AZ, UT, etc saw a large spike but you invested 15 years ago in Chicago. It's a huge city, a lot of growth seen in that time. Well done, keep investing in what you know. If you are curious on the market I would guess you have the ability to test the waters

John Clark · Answer

A market “got away” only if you could have had a viable presence there and didn’t. Note the word “viable.” If you had not team in those areas and could not have reasonably developed one, then you missed thing.

You say you’ve done well in Chicago. Expand to northwest Indiana— areas you’ve driven and inspected yourself, so no more than an hour away.Get a team in place and try it for a few years. Then build a team in Indianapolis and make the jump. Get away from Illinois. It’s beyond bankrupt.

John Warren · Answer

@Craig Sparling the grass is not always greener. I invested briefly out of state, and while I made money, I wasted a lot of time chasing returns. I didn't have a good team in place, and I had to go save the investment every so often. In retrospect, I could have driven 10 minutes from my house and found good deals.

Chicago has always been such a solid market for small multi units. They are expensive right now because people want to buy them and live in them and rent them. I do not agree with others that the north side is overpriced. Look at the other top cities in the USA. Chicago is still pretty cheap in comparison.

Jordan Ray · Answer

Craig! That's great your portfolio is working out! I would say to just keep doing what your doing, do you want to deal with bad tenants, evictions, unpaid rent, tenant complaints, tenant negligence, lawsuits, etc? Probably not. Don't stop doing something if it works!

Craig Sparling · Answer

One small word in defense of retrospection.  One of my favorite authors, Nicholas Nassim Taleb, sold me on the concept of Skin in the Game and holding all pundits accountable for prior predictions, myself included.  Only by reviewing past buy/walk decisions and market decisions will I be able to hone my chops for future decisions.

Chicago vs the world: Forgone opportunities?

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