All Forum Posts by: Jeremy H.

What I'd be really interested in is a yearly update. 

The things that get me are: 

Liberal politics in the city - this may be a benefit though, since they probably allocate a lot for affordable shelter and the Sec 8 is all but guaranteed. 

I think the maintenance/repairs are vastly underestimated - 5% for vacancy and 10% for repairs. I would think you'd be looking at 30% between both repairs and vacancy at the minimum. Reason being is that these are older properties and rough tenants. 

These are cheap properties, probably in sketch locations (since that's where cheap properties are) so even a huge increase in appreciation % doesn't translate to a huge change in absolute value. Appreciation is likely low. 

I would listen to @Jay Hinrichs - he's literally done this exact thing and opted out of it - for good reason. There's likely some good lessons he's learned that you may heed 

I'm not betting against you, but it seems like it could be a massive problem snowballing in the future. But then again, people are successful at this, people run profitable trailer parks and all that, so there's a chance it works as well. Keep us updated!

Quote from @James Hamling:

Quote from @Jeremy H.:

Quote from @Allan C.:

@Jeremy H. I don't have a dog in this fight, but I'll side with others on this debate. For any commodity market, costs are passed to consumers when demand balances or outstrips supply. If operating costs increase, then customers/tenants will eat the costs in tight markets. If supply exceeds demand, then the lower cost supplier will set market rates, and high cost supplier will lose money.

for the current case of real estate, most markets have more rental demand than supply. So while current market rents may not reflect higher insurance costs, after 1-2 years when owners realize higher costs and go through renewal cycles, market rents should increase. If you're in a market thats going through a population exodus, then you are correct that it'll be harder to pass through costs  

you are debating macro-economics while ignoring supply and demand fundamentals. 

Maybe we're in that period you're referring to when rental rates have not caught up to the increase in insurance premiums and taxes. 

I'm talking about the last 4 years in my area - not the last 20-30. I think over the long term sure it balances out.

For example - 2023-2024 - my area saw a NET decrease in rental rates. Population still increased. Insurance increased dramatically. Property taxes went up as well. This is what the data and numbers show. Feel free to look it up.

I'm not intending to fight - but I live here, invest here, have for the past 4 years and have access to my property manager's data (over 500 properties) and this is what is happening. Rents are essentially static for the past 4 years and insurance and taxes have both increased. You cannot offset the increase in insurance premiums by increasing your rent. You'll simply sit vacant for a few months, lower the price then get a tenant. So at this point, no, you cannot pass the cost on to the consumer - this would place you above market rent and you will lose money through vacancy. In a few years, sure this may change BUT as of right now, cashflow is lower than what it was in 2024, 2023 and 2022. I can see the data for over 500 properties and this is the what the numbers show, as a general rule, across the board. 

You have a good point bringing up demand - a lower demand again proves exactly how rents do not always go up. And proves how expenses (insurance premiums and prop taxes) can easily outpace rental rates. You can have an increase in population and still have a low demand for rentals or a low enough demand that rental rates do not outpace T&I for awhile. A good point that @James Hamling overlooked as well. 

 Jeremy you are the very definition of Arrogant Ignorance. 

Good luck with that. 

And a very good bye.

Thanks James! Continue eating your crayons!

Quote from @Clint Galliano:

@Jeremy H. Your ire should not be directed at rental property investing, but increases in your expenses. Insurance in Louisiana has been ridiculous over the last three years. My personal home and my portfolio insurances have tripled since 2021. It is something that happens and if your deals did not have enough meat on the bone to accommodate those increases, then maybe it is time to consider a transfer of your equity to better deals by selling the property or properties.

Now, I am not familiar with the Lafayette rental market, but I would think that it is at least as active as the Houma/Thibodaux MSA due to a wider economic diversification. As an example, my gross rents have increased by approximately 16% and that is with mostly long-term tenants. Not the same as the tripling of my insurances, but I am still cash flowing. 

I do have the occasional turnover and just did some major rehab in one unit, but that unit had not been touched for almost 12 years other than some minor paint touchups. 

Let's look at your list of issues:

+Escrow increases - Your "note" keeps going up. This is, as you and others have agreed, because of the insane insurance environment in Louisiana post-Ida. On top of that, the parish assessors typically reassess the majority of the parish every 2 years, thus increasing your property taxes. Additionally, don't hesitate to review your insurance every year and shop for a new policy. If you haven't done that recently, you can change policies mid-term, but you will need to make sure your bank or loan servicer know if you do change.

+Maintenance/Repairs - It sounds like you have may regular turnover in your property or properties or tenants that are rough on your property(ies). This is a management issue. I'm not sure what type of property you have, but I find having long-term tenants cuts down on the amount of repairs and definitely will reduce the number of turnovers needed in a given time period. This needs to work in conjunction with a strong lease and thorough tenant on-boarding. 

+Property Manager - You mentioned having a property manager. Are they doing what you need them to do? Are you using their lease or your own? Are they following your rules for your portfolio or theirs? Are they constantly turning over tenants? Having tenants default? Charging you for constant repairs? It may be time to look for another property manager. 

These are all some suggestions that may improve your current situation. Feel free to reach out if you have any questions.

 Thanks for the insight Clint, and I think you bring up good points. A lot of my frustration hinges on insurance premiums. The massive increases we've seen the past few years have really eroded cashflow. I think a reasonable increase is expected and worked into "buying" numbers - but we have been seeing a lot more than a reasonable increase. 

The original point I was trying to make is that, for our area, the increase in expenses (ie: property taxes and insurance premiums) is outpacing rent growth. Do I think this will continue over 20 years - maybe not, but it seems to have been the case for the last 4 at the minimum. Zillow actually shows negative rent growth for most of the areas around me (over the last year), while population is still increasing. 

As far as my deals - I did them under scenario A over the past few years. Would I do the all same deals under scenario B (where we are at today) - no, I'd probably do half. The increased insurance premiums have just turned some great deals into ok deals, and some good/ok deals into ones I wouldn't make today. 

The property manager I have now I like, I did leave the one I initially used because too many of their services were in-house and they were overcharging for basic things. Had that then a couple of separate quality and report issues.  

Turnover has been pretty low for the most part, but I agree long-term tenants is a key. Although a way to keep long term tenants is not increasing rent after the first year. So you're looking at 2 years minimum of the same rent. Not like you're going to hit them with a 10% rent increase after 2 years either - at least with me, that would likely result in someone moving out (unless you were low on rents to being with). 

Quote from @Allan C.:

@Jeremy H. I don't have a dog in this fight, but I'll side with others on this debate. For any commodity market, costs are passed to consumers when demand balances or outstrips supply. If operating costs increase, then customers/tenants will eat the costs in tight markets. If supply exceeds demand, then the lower cost supplier will set market rates, and high cost supplier will lose money.

for the current case of real estate, most markets have more rental demand than supply. So while current market rents may not reflect higher insurance costs, after 1-2 years when owners realize higher costs and go through renewal cycles, market rents should increase. If you're in a market thats going through a population exodus, then you are correct that it'll be harder to pass through costs  

you are debating macro-economics while ignoring supply and demand fundamentals. 

Maybe we're in that period you're referring to when rental rates have not caught up to the increase in insurance premiums and taxes. 

I'm talking about the last 4 years in my area - not the last 20-30. I think over the long term sure it balances out.

For example - 2023-2024 - my area saw a NET decrease in rental rates. Population still increased. Insurance increased dramatically. Property taxes went up as well. This is what the data and numbers show. Feel free to look it up.

I'm not intending to fight - but I live here, invest here, have for the past 4 years and have access to my property manager's data (over 500 properties) and this is what is happening. Rents are essentially static for the past 4 years and insurance and taxes have both increased. You cannot offset the increase in insurance premiums by increasing your rent. You'll simply sit vacant for a few months, lower the price then get a tenant. So at this point, no, you cannot pass the cost on to the consumer - this would place you above market rent and you will lose money through vacancy. In a few years, sure this may change BUT as of right now, cashflow is lower than what it was in 2024, 2023 and 2022. I can see the data for over 500 properties and this is the what the numbers show, as a general rule, across the board. 

You have a good point bringing up demand - a lower demand again proves exactly how rents do not always go up. And proves how expenses (insurance premiums and prop taxes) can easily outpace rental rates. You can have an increase in population and still have a low demand for rentals or a low enough demand that rental rates do not outpace T&I for awhile. A good point that @James Hamling overlooked as well. 

I think they do 100% - the thing is they will profit regardless of your success.

You use a realtor to buy/sell a property - they make a commission regardless on if your rental is profitable or not. They may lease the property and make a commission when they place a tenant. Then when you lose money and decide to sell - there they are sharing in your pity and making another commission. I would say this is 98% of realtors. There are no qualifications you need to be a realtor - I have witnessed many of them eating crayons directly from the box. 

The property manager may have some interest in your success (if you get a good one) simply because they are making the most consistently - 1st months rent plus 10%/month. Take a one of my basic rentals - rents for $1250/mo - PITI is ~750 - CapEx/repairs ~100/mo - so say cashflow is $400/mo or $4800/year. Property manager makes $1250 + (125*12) = $2750/year. Often times a lot of the services they offer are in-house - yardcare, handyman etc so they are taking another cut off services they provide as well. So the Property manager is making 60%+ of what you make as the landlord (speaking in straight cash flow terms). Toss in a month or vacancy, a high repair bill, a remodel or what have you and they are making just as much as you are.

Lenders I put in the same basket as realtors - what qualifications do you need to be a lender? Seems 98% of them just want to take a picture holding a big key sign and promote their business on social media. They're making a cut when you buy/sell/refi etc. 

So none of the parties, other than maybe the property manager, cares or is effected by your success. I would say this is true 98% of the time. There is no fiduciary responsibility from any of those parties.  

Don't forget the gurus selling the classes - another 98% group that will happily take your money (and probably makes more from selling classes than their RE investments). They again will not profit off your success - so why would they care? They just need a couple "success" stories to tout over and over again. 

Quote from @James Hamling:

Quote from @Jeremy H.:

Quote from @Joe Villeneuve:

Quote from @Jeremy H.:

Quote from @Joe Villeneuve:

Quote from @Jeremy H.:

Quote from @Joe Villeneuve:

Quote from @Jeremy H.:

Quote from @Henry Lazerow:

Huh? Definitely not a guru, I invest myself and am a realtor with many repeat clients. What is there not to believe about real estate cash flowing? Few years ago every one talked about cash flow on here, now people just talking about appreciation. I only buy positive cash flow and so do my clients. It’s the only safe way to scale and cash flow is most definitely NOT a myth. That 4 I mentioned was bought 5 years ago. Of course you won’t make 25-35k net in year 1 or 2 but if you buy 3/4 unit buildings in a growing market you can after a few years. Rents go up and mortgage stays the same aka they cash flow more and more the longer you hold even with a mortgage. 

 Since when does the mortgage payment stay the same?

Do you not have taxes? Do you not have insurance? Do those both not increase every year or every couple of years at the minimum. Everyone's mortgage payment will increase over time due to taxes and insurance. Ask anyone in Florida near the coast. Ask anyone in California near fire territories. 

Interest rates were what, near 3%, 5 years ago. And what today - probably near 8%. So the pre-covid era is much different than the post-covid era. In terms of appreciation as well. We own a family cabin in Tennessee - was ~275k or so back in 2018. Now it's easily 850k. But do I think it makes sense to cash flow or see the appreciation pre-covid in the post-covid era? No. 

Do I think Chicago Illinois is appreciating like you said? Nope. Getting the appreciation like you mentioned (850k valued 4 plex) and netting 35k/year in cashflow. I doubt it seriously. 

Mortgage payments stay the same.  Just because you pay taxes on the same bill as your mortgage doesn't change the mortgage.  Taxes go up, insurance go up.  they are two separate bills.

Yes, exactly. Point is whatever overall monthly payment you are making on the house increases over time. 

So the notion of - "payment staying the same while rent increases" is false. The monthly expense payment increases over time. You rehab and increase the value - assessed at a higher value and now have higher taxes. 

We've seen a 50% insurance increase here in the last last 2 years - that's like the minimum. Lots of people in higher risk zones are seeing 100%+ or even canceled policies with no option to renew. 

The mortgage payment doesn't change.  The taxes and insurance does.  That isn't the same as the mortgage payment increasing, even though you may pay for your taxes in the monthly payment.  The mortgage part doesn't increase.

Yes, I understand the distinction. 

P&I stays the same for the duration of the loan. PITI increases. 

You're responsible for PITI so your overall monthly payment increases. 

Monthly payment, not mortgage.

Rents go up and mortgage stays the same aka they cash flow more and more the longer you hold even with a mortgage.

The above statement doesn't hold nearly as much water when you consider taxes and insurance in many parts of the country. I'd actually say the opposite for many parts of the country - I would wager that taxes and insurance outpace rent growth.

Facts NOT feelings Jeremy..... Let's give facts a shot. 

Your wager is not just wrong but WILDLY wrong. 

Let's put this to math. Using real world not theoretical property. 

Property is mid 300's for current value, new build so tax assessor is nailing for maximum, no time lag in assessment being outdated. 

Property tax at $3,650 a year. 

Insurance is $2,245 yr. 

Rents are $2,745 mnth = $32,940 yr. 

If rents go up ONLY LT historical average (4%), NOT post covid averages (post covid was 20%+ annually).

 That 4% makes next annual increase of rent revenues $1,317.60.

So for p.tax and insurance to out-pace rent appreciation, you need them to annually increase, year after year after year, by a factor of inflation-rate X 7. 

Please, explain how p.tax and insurance will exist in some inflationary bubble of 700% all other inflation? 

Your whaling how p.tax and insurance has gone up. Yup, JUST LIKE EVERYTHING ELSE INCLUDING RENTS. 

P.tax and insurance rates are REACTIVE, because they are based upon a % of the property value. Property values go UP, yes, those payments go up. BUT in vast majority of cases the % rate at which they are being assessed against the property value has laid flat or gone DOWN, not up. 

Look it up, find out at what % rate there being billed. 

And it should be common sense. To insure a $350k value home costs more then a $225k value home, because it's MORE being insured against. It's really not complicated. 

Insurance premiums are reflective of the loss risk being insured. More risk = more $, more $ being insured = more $ in premiums. 

Every bit of your argument is flawed Jeremy. Your arguing on how you FEEL thing are vs how they actually ARE and the facts of math. 

And lastly, another fact, the Landlord does NOT pay the increase to p.tax and insurance, THE TENANT DOES. The only way around this is to be doing land lording WRONG, a self-inflicted injury. 

So YES, the math is VERY clear and well documented for decades upon decades upon generations. Rent rate increases out pace p.tax and insurance rate increases in every instance but the most miniscule of time lenses. 

Feelings have no place in a sport of maths. 

James, that's a lot of words without really saying anything. 

Go look at Florida's insurance rates. Or Alabama, Georgia, Louisiana anywhere near the coat that has been hit with hurricanes. 

Here it is super simple for you:

Scenario A:

Rent: 1200/mo or 14400/year 

Insurance: 200/mo or 2400/year 

Property tax: 50/mo

Cashflow = 1200 - 200 - 50 = 950

Scenario B:

Rent: 1260/mo or 15120/year. 5% increase. Unrealistic in my area for a yearly 5% increase. I'd say 2-3%/year. Again, your area may be seeing a rent increase. There has been no rent increase in my area. Or very very minimal. Sure you can raise your rent and then sit vacant. 

Insurance: 300/mo or 3600/year (50% increase in insurance, this is the norm in the south). The value of the home is not increasing substantially at all - the primary reason for the increase is higher risk is due to storms every year the past several years. There's only a couple few carriers that even ensure in the South. You're actually seeing home prices come down now and guess what, insurance is still going up. 

Property Tax: 70/mo. We have very little property tax increase in LA, but we have a state income tax. You could say this increases by $240/year. The % being billed is a moot point - it's still going up. If I have a 100k house that appreciates to 1mm and the property tax goes from $10 to $11 - that's still an increase. I couldn't care less what the percentage is in relation to the value of my house - bottom line is that the expenses are still going up. 

Cashflow = 1260 - 300 - 70 = 890

Which scenario has more cashflow? Scenario A or B? 

Not only that - there are many people here that have had to move due to increases insurance premiums. Then guess what? They can't sell the house because the insurance is too high. 

There's no feelings here bud, I can take a quick look at my property mangers statements and see that rents have not increased much at all while taxes and insurance have increased. And the increase in insurance outpaces the increase in rent, by a long shot. This is generally true for about 500 different properties here in south LA. This has easily been the case for the past 4 years. 

As far as the tenant paying the increase to property taxes and insurance - this is a zero logic statement. The directly pay the rent. The owner directly pays the property taxes and insurance. Sure you can attempt to have them "pay" through an increase in the rent - but again you will not be able to charge over market rent. If the market rent is not increasing then you will not be passing anything on to the tenant. At best you can increase your rent and pass on a portion of the insurance premium and tax increase - but again insurance premiums are outpacing the increase in rent. 

Quote from @Joe Villeneuve:

Quote from @Jeremy H.:

Quote from @Joe Villeneuve:

Quote from @Jeremy H.:

Quote from @Joe Villeneuve:

Quote from @Jeremy H.:

Quote from @Henry Lazerow:

Huh? Definitely not a guru, I invest myself and am a realtor with many repeat clients. What is there not to believe about real estate cash flowing? Few years ago every one talked about cash flow on here, now people just talking about appreciation. I only buy positive cash flow and so do my clients. It’s the only safe way to scale and cash flow is most definitely NOT a myth. That 4 I mentioned was bought 5 years ago. Of course you won’t make 25-35k net in year 1 or 2 but if you buy 3/4 unit buildings in a growing market you can after a few years. Rents go up and mortgage stays the same aka they cash flow more and more the longer you hold even with a mortgage. 

 Since when does the mortgage payment stay the same?

Do you not have taxes? Do you not have insurance? Do those both not increase every year or every couple of years at the minimum. Everyone's mortgage payment will increase over time due to taxes and insurance. Ask anyone in Florida near the coast. Ask anyone in California near fire territories. 

Interest rates were what, near 3%, 5 years ago. And what today - probably near 8%. So the pre-covid era is much different than the post-covid era. In terms of appreciation as well. We own a family cabin in Tennessee - was ~275k or so back in 2018. Now it's easily 850k. But do I think it makes sense to cash flow or see the appreciation pre-covid in the post-covid era? No. 

Do I think Chicago Illinois is appreciating like you said? Nope. Getting the appreciation like you mentioned (850k valued 4 plex) and netting 35k/year in cashflow. I doubt it seriously. 

Mortgage payments stay the same.  Just because you pay taxes on the same bill as your mortgage doesn't change the mortgage.  Taxes go up, insurance go up.  they are two separate bills.

Yes, exactly. Point is whatever overall monthly payment you are making on the house increases over time. 

So the notion of - "payment staying the same while rent increases" is false. The monthly expense payment increases over time. You rehab and increase the value - assessed at a higher value and now have higher taxes. 

We've seen a 50% insurance increase here in the last last 2 years - that's like the minimum. Lots of people in higher risk zones are seeing 100%+ or even canceled policies with no option to renew. 

The mortgage payment doesn't change.  The taxes and insurance does.  That isn't the same as the mortgage payment increasing, even though you may pay for your taxes in the monthly payment.  The mortgage part doesn't increase.

Yes, I understand the distinction. 

P&I stays the same for the duration of the loan. PITI increases. 

You're responsible for PITI so your overall monthly payment increases. 

Monthly payment, not mortgage.

Rents go up and mortgage stays the same aka they cash flow more and more the longer you hold even with a mortgage.

The above statement doesn't hold nearly as much water when you consider taxes and insurance in many parts of the country. I'd actually say the opposite for many parts of the country - I would wager that taxes and insurance outpace rent growth.

Quote from @Joe Villeneuve:

Quote from @Jeremy H.:

Quote from @Joe Villeneuve:

Quote from @Jeremy H.:

Quote from @Henry Lazerow:

Huh? Definitely not a guru, I invest myself and am a realtor with many repeat clients. What is there not to believe about real estate cash flowing? Few years ago every one talked about cash flow on here, now people just talking about appreciation. I only buy positive cash flow and so do my clients. It’s the only safe way to scale and cash flow is most definitely NOT a myth. That 4 I mentioned was bought 5 years ago. Of course you won’t make 25-35k net in year 1 or 2 but if you buy 3/4 unit buildings in a growing market you can after a few years. Rents go up and mortgage stays the same aka they cash flow more and more the longer you hold even with a mortgage. 

 Since when does the mortgage payment stay the same?

Do you not have taxes? Do you not have insurance? Do those both not increase every year or every couple of years at the minimum. Everyone's mortgage payment will increase over time due to taxes and insurance. Ask anyone in Florida near the coast. Ask anyone in California near fire territories. 

Interest rates were what, near 3%, 5 years ago. And what today - probably near 8%. So the pre-covid era is much different than the post-covid era. In terms of appreciation as well. We own a family cabin in Tennessee - was ~275k or so back in 2018. Now it's easily 850k. But do I think it makes sense to cash flow or see the appreciation pre-covid in the post-covid era? No. 

Do I think Chicago Illinois is appreciating like you said? Nope. Getting the appreciation like you mentioned (850k valued 4 plex) and netting 35k/year in cashflow. I doubt it seriously. 

Mortgage payments stay the same.  Just because you pay taxes on the same bill as your mortgage doesn't change the mortgage.  Taxes go up, insurance go up.  they are two separate bills.

Yes, exactly. Point is whatever overall monthly payment you are making on the house increases over time. 

So the notion of - "payment staying the same while rent increases" is false. The monthly expense payment increases over time. You rehab and increase the value - assessed at a higher value and now have higher taxes. 

We've seen a 50% insurance increase here in the last last 2 years - that's like the minimum. Lots of people in higher risk zones are seeing 100%+ or even canceled policies with no option to renew. 

The mortgage payment doesn't change.  The taxes and insurance does.  That isn't the same as the mortgage payment increasing, even though you may pay for your taxes in the monthly payment.  The mortgage part doesn't increase.

Yes, I understand the distinction. 

P&I stays the same for the duration of the loan. PITI increases. 

You're responsible for PITI so your overall monthly payment increases. 

Quote from @Joe Villeneuve:

Quote from @Jeremy H.:

Quote from @Henry Lazerow:

Huh? Definitely not a guru, I invest myself and am a realtor with many repeat clients. What is there not to believe about real estate cash flowing? Few years ago every one talked about cash flow on here, now people just talking about appreciation. I only buy positive cash flow and so do my clients. It’s the only safe way to scale and cash flow is most definitely NOT a myth. That 4 I mentioned was bought 5 years ago. Of course you won’t make 25-35k net in year 1 or 2 but if you buy 3/4 unit buildings in a growing market you can after a few years. Rents go up and mortgage stays the same aka they cash flow more and more the longer you hold even with a mortgage. 

 Since when does the mortgage payment stay the same?

Do you not have taxes? Do you not have insurance? Do those both not increase every year or every couple of years at the minimum. Everyone's mortgage payment will increase over time due to taxes and insurance. Ask anyone in Florida near the coast. Ask anyone in California near fire territories. 

Interest rates were what, near 3%, 5 years ago. And what today - probably near 8%. So the pre-covid era is much different than the post-covid era. In terms of appreciation as well. We own a family cabin in Tennessee - was ~275k or so back in 2018. Now it's easily 850k. But do I think it makes sense to cash flow or see the appreciation pre-covid in the post-covid era? No. 

Do I think Chicago Illinois is appreciating like you said? Nope. Getting the appreciation like you mentioned (850k valued 4 plex) and netting 35k/year in cashflow. I doubt it seriously. 

Mortgage payments stay the same.  Just because you pay taxes on the same bill as your mortgage doesn't change the mortgage.  Taxes go up, insurance go up.  they are two separate bills.

Yes, exactly. Point is whatever overall monthly payment you are making on the house increases over time. 

So the notion of - "payment staying the same while rent increases" is false. The monthly expense payment increases over time. You rehab and increase the value - assessed at a higher value and now have higher taxes. 

We've seen a 50% insurance increase here in the last last 2 years - that's like the minimum. Lots of people in higher risk zones are seeing 100%+ or even canceled policies with no option to renew. 

Quote from @Henry Lazerow:

Huh? Definitely not a guru, I invest myself and am a realtor with many repeat clients. What is there not to believe about real estate cash flowing? Few years ago every one talked about cash flow on here, now people just talking about appreciation. I only buy positive cash flow and so do my clients. It’s the only safe way to scale and cash flow is most definitely NOT a myth. That 4 I mentioned was bought 5 years ago. Of course you won’t make 25-35k net in year 1 or 2 but if you buy 3/4 unit buildings in a growing market you can after a few years. Rents go up and mortgage stays the same aka they cash flow more and more the longer you hold even with a mortgage. 

 Since when does the mortgage payment stay the same?

Do you not have taxes? Do you not have insurance? Do those both not increase every year or every couple of years at the minimum. Everyone's mortgage payment will increase over time due to taxes and insurance. Ask anyone in Florida near the coast. Ask anyone in California near fire territories. 

Interest rates were what, near 3%, 5 years ago. And what today - probably near 8%. So the pre-covid era is much different than the post-covid era. In terms of appreciation as well. We own a family cabin in Tennessee - was ~275k or so back in 2018. Now it's easily 850k. But do I think it makes sense to cash flow or see the appreciation pre-covid in the post-covid era? No. 

Do I think Chicago Illinois is appreciating like you said? Nope. Getting the appreciation like you mentioned (850k valued 4 plex) and netting 35k/year in cashflow. I doubt it seriously.