Buying the next property

[Emily M.]

Hi there. I'm new. We bought a 3-flat a year and a half ago, fixed it up, live in one unit and cash flow with two rented. We'd like to use this property as our home base and buy more. How do you decide what to do next? We will have some cash to put toward the next project, but not a ton. We're in Evanston, IL. We're thinking about buying a two-flat or possibly another three-flat, but we may have to wait because there's not much on the market right now and circle prospecting hasn't yielded much. We've also considered a fix-and-flip for some additional cash, though our long-term strategy is buy-and-hold. We would like to get into commercial down the line (used to work in retail development) but do not have the capital yet. Existing two flats in our neighborhood are hard to find, would cost (usually) somewhere between 300-500k++, and individual units (say 2 bedroom) renting for anywhere between 1100-3000/mo depending on size and finishes, with the bulk renting at somewhere between 1300-1800, so rate of return is a lot lower. We've also considered moving into a different market (managed section 8 in a former life, albeit not in the Chicago area) for a better rate of return, though most of my rehab experience is higher end. Thoughts?