All Forum Posts by: Account Closed

@David Danforth You know, something you said really resonated with me. The chief advantage of investing in Chicago - which was really more of a safety - was the ability to be on the ground, but I'd be robbing myself of the ability to develop the "manage the manager skillset" which is integral to my long term strategy. Anywhere more than an hour or two away and I'll need to be relying heavily on my team, which I suppose I was reluctant to do. Until you'd mentioned it, it hadn't occurred to me that I was, subconsciously, avoiding that aspect of it, disguising my aversion to that challenge. But since my strategy is to implement systems and grow, I may as well get started in a better market and dive in, learning to manage the manager and trust the systems from the get go. Since I'd need to spend a day traveling to and from anyway, it doesn't matter whether the properties are in Detroit or Texas or Albuquerque; I should aim for the most fertile market. Thank you.

@Deana Johnson Right on, I've looked into those. Unfortunately, from what I've read, they've got negative jobs and population growth. Rehab and repositioning are part of the strategy, certainly, but the areas aren't attractive enough to me.

@John Casmon For sure, for sure. Insofar as property management goes, unless I wind up investing in Chicago in a <30 unit, I'll be farming it out anyway. But I can always shop around for PM services that will work with me on implementing systems and stay firm with the "other income" line items (late fees, move in fees, RUBS, laundry service, pet fees, lockout fees, new key fees, etc.). 

My goal is financial freedom and to quit my 9-5. The strategy is to reposition underperforming multifamily assets, and I'll definitely be syndicating or partnering for capital - in fact, an investor base is something I'm cultivating even at this early stage. If I had the capital on hand to take part in someone else's syndication I certainly would, but the path forward seems to be one of active investing and KPing until I reach that goal and have enough passive income to make passive investing feasible.

And thanks for all your input everyone!

Thanks for your responses everyone!

In Chicago I'm definitely looking at properties in surrounding metros that aren't within the city limits themselves. @Tracey Scanlon and @Ross Denman right on, NWI and northern Indiana are definitely on my radar.

@Johnathan Klemm I'm a hands on type of person too, which is the only reason I'm still considering Chicagoland. I'd rather have direct oversight when I'm starting out, bloody my knees and develop a track record close to home before scaling up. Plus, who knows, things could change for the better. The new Pritzker regime is definitely mixing up the status quo, and while taxes are going up this guy really seems determined to make significant positive changes. So even though IL is in a bad way now, it could be on the upswing.

@Kristen Marino I haven't been listening to specific podcasts about ABQ, but I've been keeping up with economic news, crunched the numbers, and spoken to some mentors about it. The conclusion I've reached is that ABQ is poised to become an emerging market. I'm really keeping an eye on it because it's set to become a filmmaking hub, so I'd be able to fall back on that for a gig or two if I made the move and needed the support. Georgia's regressive abortion legislation is threatening to drive productions from the area, and ABQ has the infrastructure in place to make it an attractive hub anyway, but especially when compared to the high costs of filming in, say, Chicago. I figure it'd be a good place to get in early, but until the law goes into effect in 2020 we won't know if they're serious about leaving the state. In either case, ABQ seems to be gearing up!

Hey all,

I'm placing this in the "Investor Psychology" section because I'm just sort of pontificating in this post, stream of consciousness style, ya dig? I'm not looking for any specific type of response but I welcome all replies.

I'm in the process of analyzing markets to dial in on my first multifamily property. I'm doing the value add buy and hold strategy, ye olde multifamily BRRRR. C- to low B-class value add plays.

I currently live in Chicago, which has a large number of properties available, but has a lot of negatives: astronomical taxes, population loss, jobs loss, corrupt government, crumbling infrastructure. So, based on the advice of a mentor, I expanded my market search.

Since it’ll be my first property, I want a high level of control to oversee the rehab, repositioning and running of the place even if I decide to employ a property management service, which I’ll decide based on the asset. Accordingly, I looked at cities within a few hours drive and find much the same: stagnant population metrics, unfavourable job metrics, unstable economies.

Now, I’m planning on moving out of Chicago within the next year or two and would like to quit my 9-5 around the same time. I love Chicago, I’m grateful to Chicago, but I’m fixin’ to giddyup on down the road. I haven’t committed to a location yet, but it’ll be somewhere warm with a good market.

I understand that there are deals to be had in any market. And I understand that any individual deal is less important than the market it is in. And I also understand that while the first deal is the hardest to get and that one should never take a ****** deal, once the first deal is done and the first asset elevated and stabilized it ultimately becomes the least important property in a portfolio: the real long term value of that first property is that it gets you on the field and in the game.

For the past week I’ve been chopping up market data and podcasts and dumping them into my brain to slow cook until I had something digestible.

The stew in my skull is roughly 1/3 market research (Chicago, Milwaukee, Madison, Detroit, Grand Rapids, south bend, Indianapolis, St. Louis, Des Moines, and Albuquerque on factors like job growth, population, population growth, unemployment, vacancy rate, price per door, market cap rates, major employers, major industries, average income, population demographics, &c.), 1/3 podcast interviews and video lessons, and 1/3 existential ruminations.

Since none of the larger nearby metros, nor the area in general, is very attractive, long distance investing seems more appealing. However, another major factor is that I don't have much capital of my own to begin with; I'm the one doing the legwork, and I'll either be partnering for capital or syndicating. Since this will be my first property, it makes more sense to me to have close proximity to provide quality control over the asset. The relative pros and cons of investing in Chicago balance out when compared to accessible alternative cities. Again, I understand that this first deal is really more of a gateway than an independent vehicle to financial freedom in and of itself.

I find myself wondering things like: should I just keep researching markets until I find a place with good metrics that I might like to live in a year or two and begin investing there, long distance? Should I trust the sheer size of Chicago to counterbalance the negative growth? And how much will a Jedi of an accountant be able to negate the burdensome taxes here?

I’ve been incorporating the advice I’ve heard from the podcasts to my brain stew: don’t rush, but make a move; don’t make emotional (read: fearful) decisions; the perfect [deal] is the enemy of the good [deal]. I’m playing the long game and this has been a significant mental hurdle for me: deciding whether it’s better to plant a flag here and now or to sacrifice control for more attractive market metrics.

As it stands I won't be financially able to relocate for at least another 12 months, so if I want to get in the game “now” and not “at least 12 months from now,” Chicago seems to be the place to make my first move.

Thank you for consuming my brain stew. Perhaps some of you’ve made something similar before, I’d love to know what you put in it and how it turned out. Or, if I've got it wrong, please help me understand where or how I went astray.