All Forum Posts by: Shawn Q.

I would (and do) avoid Urbana in favor of Champaign. The taxes in Urbana are much higher, and the registration and review is a hassle. For me to buy in Urbana it would need to be a screaming good deal, or a house hack/similar. 

I would be careful about investing in the area without knowing the market extremely well. There are some challenged areas and in many ways it's block-to-block whether it's worth investing. Also, the overbuilding on/near campus is going to be an issue, and soon I think. While there will always be a demand for an individual house I think the new units coming on the market soon are going to depress rents, and the building is ongoing. Until new housing stops being approved we won't know how stable the rental market will be. I'll include a link below to a recent article that is pretty information rich. There's only so much of a luxury renter base, and once that starts to erode I think the new buildings will need to lower their prices to maintain occupancy. Once that happens there will likely be cascading effects down the quality chain. 

That being said, the University is strong and growing. We have a high (and I think growing) percentage of well-off East Asian students in the area. If that continues, and the state stabilizes, I think we'll remain a stable market. That's a lot of "ifs" though, so make sure you're aware of the risks and your timeline going in. 

Here is the article I mentioned. 

So I have a strange one. I have a tenant that moved out - his lease ends 07/31. He's paying the rent and his uncle in town is looking for a person to sublease. They found a prospective tenant that falls under the credit cutoff (she's at a 512, my cutoff is 550). I will allow a co-signer to average up the score (in my area it's necessary as I have a lot of low or no credit renters - usually students) but her cosigner has apparently gotten cold feet. 

The uncle is now asking if he can be the co-signer. I'm leaning toward no for two reasons: I think it speaks to her risk profile if she can't find someone in her personal life to be a co-signer, and it would leave me at the end of the lease term with a tenant I wouldn't normally rent to (assuming she wants to renew). I have no written guideline for this situation, and the decision here would dictate what I write up, so I want to be sure to get it right. 

Any experienced landlords have an opinion. 

I would get the rehab estimate(s) before you put in an offer. Ask your realtor for a recommendation for a GC that will work with a new investor and get you the numbers you need. You can't calculate your purchase price until you know what the market cost for what you're trying to do is in hand (even if initially it's a rough verbal estimate).

More importantly - go to the City of Champaign Neighborhood Services department today. Their office is at Neil and University in the City building. See what options they have for owner-occupied homebuyer programs. Assuming you don't own another home you might be able to get some downpayment or rehab assistance. 

Don't be afraid to offer low at that time on market, and good luck! 

Is the property commercial or residential? I've only purchased residential, so I can only speak to that. However, I've found it incredibly simple to do, and profitable. You submit the form for the purchase price and the assessed value resets in the next year to the lower amount. The only issue I've found is either the value or the taxed amount (I can't remember which) can't be reset below the first valuation (sometime in the 1980's according to the assessor) but that's still pretty darn good! 

Best example was my most recent purchase (and primary residence). Last purchase was 09/2009 for $83,000, I purchased for $29,750. So, my current market value for assessment purposes is $27,303. I don't recall what my prior yearly tax amount was, but for 2017 I paid a little under $500 and got an escrow overage distribution of $556. So, definitely worth doing!

My question is are you talking about price deflation and static inventory, or just a backing-off of the bonkers high growth rates? After 5-plus (if I recall correctly) years of 10%+ increases in price and single-digit days on market a drop to 5% price inflation and average 30 days on market would feel like a dip. It wouldn't be, but it would feel that way. 

Just because the market is growing at 50% (or some other arbitrary rate) of last year's growth numbers doesn't make it a correction in my opinion. It's just not as forgiving a market. 

I found much greater success with Zillow Rental Manager than other listing services, but I can't figure out if there's a way to remove my phone number from my listings. I have a full time job and I don't really have time to answer phone calls - I want to get people into my automated funnel. 

I've input a dummy number (the number for information) but I'd rather remove information than have bad information. Anyone know how to remove or hide that information from my public listings. 

*Also, if you're going to post some variation of "just go ahead and add your number" or some variation thereof, please save it - I've heard it before and choose to run my business differently. Thanks!

I don’t think doubling property taxes is likely. Higher income taxes, certainly, and possibly another sales tax if things get really bad, but property tax would be a reflection of local economies more than the state economy. That’s why I would focus in areas with strong demographics. Population growth and multiple secure employers being what I would see as the key factors. I can’t tell you about Quincy or Springfield against those metrics but I’ve heard that St. Louis metro is strong and growing. But that’s hearsay, not actual data. I can tell you that I invest in Champaign and taxes in urbana (the city just next door) are 30-50% higher for properties exactly the same as the ones I own. So it’s definitely worth including a jump in tax cost in your calculations.

There shouldn't be. As long as you have equity you should be able to refinance and take advantage of it. However, the bank might have a policy restricting it, so that would be an important question to ask your lenders. I believe there are also HUD/FHA restrictions if that is your existing loan type. Finally, the bank might require seasoning if you have an investment property. This would mean you'd have to hold it for 1-2 years before you could refinance, but again that will vary by lender.

The only reason you might want to do this is if you're renting to strangers. Then you can be the property manager instead of the owner of the property. The checks can go to the LLC and you can 'check with the owner' in the case of any conflict.

I rent only to friends, so I don't do this, but I've heard it mentioned as a property management strategy. 

I, too, would go with baseboard and leave the AC the way it is. Otherwise you're spending money with no return (because you can't increase rents on the basis of the improvement). 

Super impressed with the cash reserve here as well!