My Hometown, Evanston, IL

Belt Magazine described Evanston Illinois amongst the finest ‘Inner Ring’ suburbs, in their recent article: The Complications of our Deteroriating Inner Ring Suburbs. Evanston, counted amongst the midwestern greats like Grosse Pointe, MI; Lakewood, OH; and Shaker Heights, OH.

My parents are in the process of selling our family home. A two-flat in the most ethnically diverse neighborhood in Evanston, a quarter mile walk from the Chicago border. Like so many of their peers. Fleeing the tyranny of northern Illinois winter and politics, they have made their way to the affordable side of the Mason-Dixon line. They now reside in Rockbridge County, Virginia.

In my continual discussions in their small real estate endeavor, I have become rather nostalgic. Aside from nostalgia, I am trying to learn: What has my hometown and childhood taught me about real estate investing?

The Bad

Growing up in an area like Evanston, you come to learn a lot of mis-truths about real estate investing. As Illinois goes, the price to rent ratios are very high. As a fairly prestigious and culturally diverse suburb, it has the cost-of-living to match. Throw in the great schools, and you’ve got yourself a nearly expensive town.

Had they raised their family in 2015, Evanston would have been un-affordabe. We would have likely moved much farther out to a northwest suburb. As close as Morton Grove, or even as far as Kenosha, Wisconsin.

Some mis-truths I have un-learned since my childhood.

• Investing is all about appreciation. Buy in a great neighborhood with great schools, you can never lose.
• Go for size, not units.
• Living near a train is noisy and undesirables seem to show up.
• Refinance (in order to) remodel.

When the community is tight knit, and built on a notion of success that differentiates it from some nearby city neighborhoods, people let that get to their heads. I have great respect and admiration for investors who are able to look beyond the ‘fashionable’ option like my hometown, and invest in 1960’s SFs on a slab. These homes barely existed in my hometown. The few that did were in very high demand, and the returns may have been in question.

The Good

A near city or ‘Inner Ring’ suburb has the great advantage of diversity. I mean this in more than an ethnic or cultural sense. Diversity of economy always lets you know how everyone lives. At my highschool, I couldn’t count the number of people wealthier than my family, and I couldn’t count the number with less means. This perspective gives you a great look at how people live and spend their money.

Some truths reinforced by my childhood.

• It’s not what you know, it’s who you know.
• Universities provide for great stability and cultural diversity (Northwestern University is nearby).
• Small businesses really can impact a community.
• There are good deals, everywhere. Even Evanston and high-end communities like it. Just don’t be too good for something.

Where does that leave us? Same place it always does, I suppose. Find niches other people think are crazy. I just listened to Jefferson Lilly talk about Trailer Park investing on the podcast. It’s a far cry from Evanston, but I bet the income feels a bit better.