Anyone invests in Champaign-Urbana, Illinois?

Question

Hey everyone! My name is Penny and I currently work and live in Bay Area CA. My goal for 2024 is to start to invest in cash-flow out of state properties. I am interested in investing in the midwest, since I grew up in Illinois and went to college in Champaign Urbana (UIUC). So the first location I am currently looking at is the small market of Champaign Urbana. Just purely looking at multi-family listed in the area, I see that there are quite a few that meet the 1% rule, but sitting on the market for quite awhile. I am curious if anyone on here invests in Champaign Urbana, and how do you guys view the market? I would love to connect. My understanding is that there is not much new jobs opportunities and there is no population growth or decline, so not much appreciation. I also see that property taxes is not that low either.

I guess I am trying to decide if I should invest in Illinois, where I grew up, or I should instead look into markets in Ohio or Indiana when it comes to the midwest - I see many posts on here rooting for these locations. Thanks in advance for any tips or advice ~

I guess I am trying to decide if I should invest in Illinois, where I grew up, or I should instead look into markets in Ohio or Indiana when it comes to the midwest - I see many posts on here rooting for these locations. Thanks in advance for any tips or advice ~

Alfath Ahmed · Answer

I would look into the Columbus market. Tons of economic growth in the city with large companies building infrastructure here. Columbus has grown a ton over the past couple of years and appreciation and rent growth are pretty good here. I own all of my real estate here and have had tons of appreciation which I was able to refinance out of to buy more deals.

Remington Lyman · Answer

Look into Ohio and Indiana and see which one give you the best deal!

Nicholas L. · Answer

@Penny Xu

your knowledge of it might give you an advantage and make it worthwhile.  i don't know anything about the market myself, but it looks like Champaign has 90,000 people.  that is a perfectly decent sized city.

but... i would strongly recommend that, if you move forward, you really need to spend some time there in person.  are you in a position to be able to go there?  if you just buy a random property you find on Zillow it's just not going to get you very far.

Gloria N Gear · Answer

Hi Penny, I do not personally know the Champaign/Urbana market, but my cousin used to be the marching band director there and it is a beautiful little community.  The investors I know that are successful there cater to the college market.  I am in Indianapolis (only a couple of hours from there) so a similar feel but not so rural with a thriving job market.  Let me know if you would like to hop on a call to have a conversation about that.

Nicholas L is right though -- OOS investing is a lot of work and the key is to get surrounded by the right team - property manager, contractors, etc.

Nicholas L. · Answer

@Penny Xu

a lot of the posts rooting for these locations are out of date.  the rise in interest rates has hurt cash flow everywhere.

it's fine to invest in the midwest from California, but you'll need to really put time and effort in, or the risk won't be worth the reward.  OOS investors consistently underestimate the cost of capex and tenant turnover, and if you're netting $100-200 per month, an unanticipated capex item or expensive turnover can really set you back.  for an example of a thoughtful discussion:

https://www.biggerpockets.com/forums/48/topics/1159104-overl...

can you house hack in the Bay Area?  i know that might be difficult - but getting a great property in the midwest that cash flows and doesn't have deferred maintenance is difficult as well.

https://www.biggerpockets.com/forums/48/topics/1160450-run-i...

hope this helps.

Anyone invests in Champaign-Urbana, Illinois?

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