How is the Joliet RE Market

Question

Hello Everyone,

I am an investor looking to learn more about the Joliet Rental Market. Happy to speak to anyone about this.

Garrett Tierney · Answer

@Brian Geiger I have 4 units in the Cunningham Neighborhood, west of the river, and adjacent to the Cathedral Area. Rents are solid in this area, creating very reasonable cash flow given the relatively low purchase price barrier to entry (at least in direct comparison with the suburbs to the NW such as Downers, Naperville, Lemont, Wheaton, etc.). I had no shortage of applicants for my 4 listings, however, you will likely need to be flexible with prospective tenants in regards to credit scores (600+ was very rare amongst a pool of 50+ applicants in the area). With patience and diligent tenant screening, you can find reliable tenants, as you likely can in any area. Things to be prepared for in Joliet are issues with old knob and tube electrical, leaky/unstable old limestone foundations, and many radiant heating systems with galvanized water pipe and boiler systems that can be very expensive to maintain, or replace. Sewer service lines in many areas throughout the City can also be an issue given their old age, however, the City performs FREE sewer scopes https://www.joliet.gov/residen...

Highly recommend using the crime filter on Realtor.com if you are searching what's available on the MLS, as it is a good indicator of some of the high crime areas to avoid. Joliet has its pros and cons but is certainly a viable rental market if you are willing to be thorough with tenant screening and preventative maintenance.

Garrett Tierney · Answer

@David Kohler understood regarding the lack of inventory, I think that is the case pretty much everywhere in the SW suburbs right now at least with multi-fam. Now, I only have about a year and a half of market experience here, but I do think I had a couple of things work in my favor that led to me finding this deal, that you can use.

1. I was very specific about what I was searching for. I did not have an agent helping me look, but if you have access to one, or if you can find a way to add some value for an agent in return for some leads on what you are looking for, I do recommend this. However, if you are searching yourself, take the advice that you likely hear on BP all the time. Get organized, dial in on your income, debt, savings, and assets and figure out how much house you can afford. With this number, figure out what type of property you want (duplex, tri-plex, quad-plex). I would say don't limit your searches to just duplexes. Trust me, I did not plan on purchasing a 4-unit as my first investment, but I've found its not much more difficult to manage than a duplex and produces greater returns and maximum value. Now, select your market. If its just Joliet, hop onto your preferred platform (RedFin, Zillow, Realtor, other) and create a saved search with your exact criteria (i.e. Joliet, $0 - $250k, multi-family, etc.). You may not be getting these leads as soon as they hit the MLS, but you will see them the instant they come on your platform.

2. Select your strategy. First time, it's hard for me to ignore the wealth-building potential of the FHA loan to purchase a multi-family building for 3.5%, and if you are up for it, potentially building your equity by buying a dump and using the 203k program to use bank funds and fix it up. If you have a large chunk of change, and want a little less red tape, nothing wrong with getting a conventional loan and putting 20% down. If neither of these seem feasible for any reason, check out reading on BP about creative financing (this is where the bulk of my current research is focused on to find my next deal).

3. I know the real estate market at least here in IL slows down quite a bit during the winter months, and this is one thing I think worked in my favor. Less deals coming through, but also much less competition. This can be significantly to your advantage, especially as a buyer starting out and likely facing initial hesitation when it comes to going and seeing properties and submitting offers on properties. They are not being snatched up by investors in the winter as quickly as they are in the summer and spring months. An additional advantage that first-time, owner-occupant buyers can utilize is the "First Look" program offered by Fannie Mae HomePath (https://www.homepath.com/). This gives owner occupant buyers a 15 day window to view and offer on HomePath eligible properties on this website before other non-owner-occupant investors get a chance. Set up a saved search on the HomePath website with your criteria and you'll get a daily update with any properties that meet your search criteria. While I can't guarantee that you will find one, because there is not a large volume, this is how I found my property. I didn't do enough shopping for a lender and was not able to take advantage of the awesome financing programs that HomePath-eligible properties offer through Fannie Mae, but definitely look into this HomePath program and see if it is something that interests you.

If you haven't already, get specific about what you are looking for, set up your searches, and make sure you are analyzing all of those leads that come through and see if they would work for you!

Good luck, keep posting on BP with your questions!

Jaime Frausto · Answer

@Mitch Vejvoda i invest in joliet.

Have for the last  8 years.  Let me know how I can help.

Miljan Vukovic · Answer

Hello all,

I am looking for a real estate agent, who is also an investor, to help me look at a few properties in Joliet that are listed right now. If anyone has any recommendations, they would be much appreciated.

Thank you,

Mil

Donnie N. · Answer

@Jamie Kammers - Thanks. I'm doing something similar. Constantly monitoring all feeds. Getting others to keep an eye out on the grounds. The only thing I haven't done, and probably should do soon, is direct market the area. Hopefully, things will calm down a bit and I can buy back in. The numbers just aren't making sense at the moment. Anyway, congrats on finding a solid deal!

Aaron Mikottis · Answer

@Garrett Tierney,

One downside to Section 8 right now is that the Trump admin cut their funding so no rent raises are possible at this time. To get higher rent you will need to get a new tenant. My average tenant stays 2-3 years so it's been okay for me.

Another thing to consider is that the $1,500 does not include the utility allowance, which, unless you pay all the bills directly (definitely do not recommend) you need to subtract the standards from the gross rent. My guess is that the bump is very minimal this coming year but it depends on the exact setup in your property: https://www.hajoliet.org/sites...

Jamie K. · Answer

@Miljan Vukovic David Lemley with Diamond real estate Inc. Is a real estate agent/investor that spoke with me for quite some time during a showing of his which he is now renting out.  Very nice guy and very knowledgeable about REI. If my sister wasn't an agent I would be using him! Hope this helps!

Jamie K. · Answer

@Donnie N. Sorry for the late reply its been a busy week!! It took me over a year to find a good deal but I was just looking on the MLS. My sister is a realtor so we looked at quite a few and made several offers until one was finally accepted. Ever since Brandon mentioned Joliet,IL being a grest place to buy rentals for good cashflow on one of his podcasts its been blowing up with investors. It may take some time to find a good deal but they're there.

Donnie N. · Answer

I've also been looking around the Joliet and surrounding areas as well. (e.g. Richton Park, Steger, etc.) Have you guys seen significant price shift (upwards) in the last ~3months or  so as well? Places are are getting snatched up pretty quickly. I have an agent, broker, and PM all keeping an eye out. No one has seen anything solid. Any ideas why it's so crazy these past few months? @Garrett Tierney, good call on the winter months. Hopefully things could down a bit. (no pun intended)@Brian Geiger, any luck on leads?  @Jamie Kammers, any advise how you located your deal? How long did it take you to find this one?Anyone have good referral to an agent experienced working with an out-of-state investor?

Garrett Tierney · Answer

@Aaron Mikottis Looks like a slight pay bump again next year for your section 8, 3 beds! Here are the 2021 HUD market rents for section 8 in 60435 for anyone that is curious. Not too shabby. If we had emojis on here, I would drop in here a (wide-eyed-emoji).

How is the Joliet RE Market

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