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Updated over 4 years ago on . Most recent reply

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Florent Useini
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Most Popular Reply

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Eric M.
  • Flipper/Rehabber
  • Louisville, KY
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Eric M.
  • Flipper/Rehabber
  • Louisville, KY
Replied

I know nothing about this 10 to 25 unit market but I have to chuckle at the logic of the standard, Illinois is crap, responses.

Taxes, rules, laws, regulations, population decline, state/local financial strength....any of these commonly cited Illinois/Chicago "issues" are baked into the price and the deal.

If it were actually the case that these issues made Illinois property less attractive, then you would actually find what appear to be MORE deals because demand to own property would be weak. Sellers would be more aggressive to sell property to redeploy it in areas which have fewer of these issues. YOU may feel that way, but that doesn't mean most investor dollars agrees.

The fact that you can't find deals means there is more investment money wanting to own these Illinois properties for whatever reason. 

It may be the case that Illinois and Chicago are relatively more attractive to institutional investors, which makes it harder to be a small mom and pop investor. And similarly Dayton or Fort Wayne or other places might be less attractive to institutional investors and therefore relatively more "deals" appear to fall to small investors. This is almost certainly the case and if you are a small investor you should go wherever you can find deals you like.

But people frequently overweight your personal situation/opinion and assume it also applies to the majority.

It is not the case, IMO, that lack of deals in an area in any way means that area is a bad place to do business or is any indication of unfair taxes or laws or a bad economic outlook or other negatives. This violates basic supply/demand and common sense.

This apparently common view people have of the area seems to be overly influenced by media headlines, misunderstanding basic economics, and not understanding more complex economics that actually drives investment demand.

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