I would agree with him about the home values decreasing solely based off the number of for sale properties in the area currently, as well as the ones who could come on the market as owners who those STRs that are underperforming try and sell as well. 

Some of those reasons are: Continued consistent population growth, which translates into a large amount of wealth moving in, the still relatively affordable median home price, high job migration, no state income tax, relatively reasonable property taxes, business friendly.There are also some reasons to be cautious, like increasing insurance costs, threat of weather incidences, the cash flow returns have decreased due to the significant increase in prices over the past few years. 

Adding to @Bruce Woodruff: I found this on the Illinois Government website: "If your change decreases the tax due to Illinois and you want a refund, you must file an amended return (claim for overpayment) within three years after the extended due date, three years after the date your original return was filed, or one year after the date your Illinois tax was paid, whichever is latest."

Thanks KC and Joshua,Seller financing is interesting but seems complicated.Total loss on sales would materialize ~90K after transaction fees, value decrease etc.3,5k includes mortgage,tax, insurance, maintenance. 

As you look for a new lender, look for one that matches your investment strategy and can decrease the friction of buying as much as possible.

That get's added to the denominator which decreases the return number even further.Now factor in that she owns the house outright, and we have to include the full $550K in her capital equation, bringing her returns even lower per dollar invested.

IF incomes are decreasing, property values and rents will soon follow.

You can find higher ROI (on paper) here and probably in other cities…but the probability of actually collecting rent significantly decreases.

In doing so, theory would suggest that homelessness is likely to decrease due to the added volume on the supply side.  

Your ROI is actually decreased!!!