Texas investor looking to invest in Chicago

[Joel C.]

Hello,

I'm an investor located in Texas and I'm interested in branching out to the Chicago area. Can anyone recommend agents, contractors, property managers, and lenders that specialize in that area?

Thanks.

[Mike H.]

I would ask the same question. I guess my thoughts would be:

1) The chicagoland area and illinois has super high taxes (3 to 4% of the assessed in most of the chicagoland suburbs).  The mayor of chicago is pushing through one of the largest property tax hikes the city has ever seen in history. And both the city and the state have one of the most underfunded pension liabilities in the entire country as a state and a city.

Thats not typically the type of 1-2 punch people would look at when choosing which state to invest in.

2) On the plus side. The numbers for rentals here do seem to work pretty good. And I also believe the competition in Texas is extremely crowded. Not that some areas up here aren't difficult too. But I think down there it seems there is just a lot more competition.

 Down here, you can buy homes in the suburbs that are worth 140k to 150k and rent them out for 1350 to 1,400. Which means if you get them at a reasonable discount, you can be all in at 100k to 110k on those.  Not bad.

But the taxes are killing us.   In some cases, the taxes are higher than the mortgage payments on these homes. I've got a house thats assessed for 100k and I'm paying 4k in property taxes.  And thats one of my earlier houses that is a lesser home.

Most of my stuff is 130k to 150k. If they were in the same town, it would be 6k in taxes.  Not easy to make money on those numbers.  And thats not even in the city. The school district is actually junk there.

Additionally, Cook County (chicago and some of the tighter burbs are in cook county) has one of the most unfavorable landlord/tenant laws you're going to come across.  I would strongly suggest you stay out of Cook County if you invest here.  Evictions can easily take upwards of 4 to 5 months without much finagling by the tenant.

Its a crazy game that this county allows.  Even if you get a quick ruling, it takes a couple of weeks to get the court date, then the judge gives me 2 to 3 weeks to stay on top of that and then the sheriff's dept takes 4 to 6 weeks.  At best, you're looking at about 2.5 months.  But most of these tenants know the game. So pushing it to 5 or 6 months is definitely a possibility.

Thats a huge risk compared to what I hear texas is like. 30 days or less to get them out.  That mitigates your downside quite a bit there.