All Forum Posts by: Alex Bock

Quote from @Genesis Duncan:

Quote from @Alex Bock:

All great markets! Speaking for Iowa, I would recommend Cedar Rapids over Davenport. 

An Iowa investor! I was hoping someone would jump into this thread with an Iowa opinion. I'm curious what your perspective is though since I see you're in Davenport. Will you please share your thoughts?

I've lived in the Quad Cities most of my life. I love it here!

I see you've specified you're looking to stay on the Iowa side of the river, which I think is a wise choice. I am not sure what kind of properties you're looking to invest in, but I see you've mentioned you're going for cash flow. Your options in the Iowa Quad Cities are going to be Davenport, Bettendorf, and our surrounding mostly newer suburbs, which tend to be more expensive and less likely to cash flow. Bettendorf is mostly owner occupied and newer than Davenport, so that rule also applies to most of it as well. With all of this in mind, it is likely you would end up buying properties in Davenport.

Unfortunately, I don't think Davenport is headed in the same direction as Cedar Rapids and other Iowa metros. Without going into too much detail, we had a mid-rise apartment building in our downtown collapse a little over a year ago which very sadly killed 3 of our residents. You can read more about it here if you're interested. Ever since then, in my opinion, the level of incompetence and back room dealings that have been exposed in our city government has been pretty disappointing. There have been several lawsuits filed against our city by the victims, estates, etc. that I believe the city is on the losing end of, and are likely to affect the city's long-term finances. It is also my opinion that our city rental inspection department has been especially unfair with out of state investors lately, and is trying to blame everyone except themselves for our deteriorating old housing stock. Add in that our violent crime rate is almost 2x that of Cedar Rapid's, and our property management options are terrible, that is how I arrived at my answer! I hope things start improving here in Davenport, my goal isn't to trash our city... But it's just the reality of things here right now.

While far from perfect, Cedar Rapids seems to have a better city government and has the advantage of being in-land Iowa. I believe this leaves you with more housing stock to choose from because you aren't in an area surrounded by Illinois. I also think the quality of the housing stock is better in Cedar Rapids because it's a newer area. They had a huge flood 16+ years ago that cleaned out a lot of their problem areas and spurred some much needed reinvestment into the city. In terms of the economies of Cedar Rapids and the Quad Cities, they're pretty similar. Cedar Rapids has the advantage of being a short commute away from Iowa City, which is where the University of Iowa is located. This attracts a lot of students and employees that make the commute from Cedar Rapids.

I hope this was helpful!

All great markets! Speaking for Iowa, I would recommend Cedar Rapids over Davenport. 

Hi @Sunny S.! I'm here in Davenport and happy to help you with anything I can.

I don't think you're going to find a plethora of people jumping at sending you contractor recommendations. Good help is scarce around here, and the ones that do well tend to be busy and expensive. I'm finding our market is going through kind of a strange shift right now where construction costs can easily outpace RE values depending on the type of property. On top of this, our property management options also leave something to be desired. To leave you on a brighter note, I think there is still opportunity here when executed properly.  

You've gotten some great suggestions here! Similar to Ohio (and frequently confused for) is Iowa. We have an affordable cost of living and stable economy. 

It's definitely doable! I have had success with the BRRRR method in the Quad Cities using a similar amount of capital. I like the Iowa side of the Mississippi river in particular because of their landlord friendly laws and lower property taxes. No matter where you end up, make sure you have a trustworthy property manager with clear expectations. Good luck!

I see a lot of demand for Section 8 in Davenport, IA. We are within "arm's reach" of Chicago and get a lot of people coming from there. I'm sure that's a good market for it as well. 

Current interest rates are making it hard to cash flow from what I'm seeing. If you have cash, you have an advantage in today's market in my opinion. Even if you have to cash out later when interest (hopefully) goes down. 

I'm in a market where the BRRRR method is utilized frequently. Cheap, old, usually distressed single family & small multi in my market is frequently found for <$75,000. This can make for a good opportunity to make the property code compliant and do an attractive remodel to get rents up to market, then subsequently get a good tenant. I've found a 10% CCR is usually obtainable. The only thing you have to watch out for as others have mentioned is your "boots". I've yet to find a property management company in the Quad Cities to write home about. I had better luck hiring an individual.

Quote from @Dave Foster:

@Quaid Cde Baca, does it really cash flow nicely after figuring in the eviction expense (and subsequent vacancy)?  If so then that property is hard to beat.  But if adding those in as real expenses makes your cash flow look anemic then it is time to 1031 into an area, and class of property you like better.

 I agree with this. To add to it, there are a ton of people looking for homes in the QC right now. It may be time to have a look at your property management and / or strategy. 

My non-legal recommendation, cut your losses and move on. As you stated, you've just learned an "expensive" lesson that I suspect could have been much worse. Even if you have to do some mold remediation, drywall, framing, etc., you still have the rest of the house. It's on you as the buyer to know what you're buying, how to remedy issues, what it's going to cost, etc. It's easy to blame the tenants in this scenario, but a lot of renters genuinely don't understand how to care for a home. There could have also been a case of negligent landlord where they quit even asking because it never got done. Nonetheless, best of luck to you. 

Hey Damian, congrats on your purchase!

I think the ideal scenario here is to get power separated. As you say, it will increase the value of the property and you will not have to worry about this again. That said, a happy medium could be bypassing that panel and relocating it to another common area. If you don’t have any common areas, I know they use exterior panels down south pretty frequently. I’ve never seen one up here, but it could be an option. Best of luck!