When you think about the city of Chicago, you probably think about booming suburban markets, a biotech “bright spot” during the COVID-19 employment downturn, and what local real estate professionals are happily referring to as a “real estate revival”. But if Chicago is so full of opportunities these days, why is one major investor in that market selling off his properties in order to invest in Gary, Indiana, and the surrounding areas?
Well, as it turns out, this investor has been a long-time friend of Good Success. In fact, he already has several turnkey rental properties with us and has bought with us throughout the years. He just also has a large inventory in Chicago, which many investors do because they feel Chicago is close enough to Indiana that they can still keep an eye on their assets. This investor, though, says he is done keeping an eye on Chicago. He’s liquidating the Windy City inventory and bringing that capital home to Indiana.
So, what does he know that you don’t? Well, as it turns out, what our investor knows is that he likes working with Olson Property Services. He likes buying with us, and he likes how we manage our properties. He likes the values associated with Good Success. He took his capital to Chicago and, after diworsifying into that market and working with providers he did not know and real estate professionals he did not feel a level of comfort with that he felt like he needed to stay in that market. He even told me, “I really don’t like buying there, and I’m coming back to you! So don’t try to stop me with any talk about diversification.”
This investor struggled with the decision about whether to invest in Chicago or elsewhere because he was constantly hearing about diversification. Especially as COVID-19 ramped up, it because really hard to know whether the right thing to do would be stay in a familiar market or try to get into a new one while things were so chaotic. The biggest real estate investing-related result of the pandemic, in my opinion, is that real estate has become even more regionalized than it was before. I would say that real estate is more regionalized now than it has ever been. There is no national market anymore. You can easily have two markets (or more) doing completely opposite things at the exact same time even when the markets are similar. And that is why diversification is so often more of a diworsification process these days: When you spread your assets, you just sow confusion in your portfolio. It’s a bad move.
That’s why our investor loves Indiana. We are a renters’ market. The tenants in this area are good tenants. They are highly likely to value their residence and pay rent before spending money on other things. Even through the coronavirus and massive unemployment that ensued, Indiana tenants tended to go to work when possible and do their best to sustain good relationships with their landlords! I believe this is due in large part to the state’s decision to keep things as open as possible during the shutdown. So there is an element of reliability in this market that our investor values – and he values it enough to cash out of other markets in order to bring his capital home. We’re just proud to be a part of that decision.
Wish you had access to firsthand information about investors’ major decisions like this one? The Good Success Mastermind might be the answer you are looking for! Learn more and request your invitation here.