Skip to content
×
Pro Members Get
Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
ANNUAL Save 54%
$32.50 /mo
$390 billed annualy
MONTHLY
$69 /mo
billed monthly
7 day free trial. Cancel anytime
×
Take Your Forum Experience
to the Next Level
Create a free account and join over 3 million investors sharing
their journeys and helping each other succeed.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
Already a member?  Login here
Starting Out
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 4 years ago on . Most recent reply

User Stats

21
Posts
18
Votes
Jacob Dawson
  • Real Estate Broker
  • Chicago, IL
18
Votes |
21
Posts

Thinking about buying my first duplex in the Chicago suburbs

Jacob Dawson
  • Real Estate Broker
  • Chicago, IL
Posted

Hey guys, a little background before my question: 

I am 21 years old, and I live in the Chicago suburbs. I am currently a commercial real estate broker specializing in retail, and so far, I have made roughly $25,000. I am looking to invest some or all of that money into an investment property in the Chicago suburbs. I am looking to buy in the western suburbs where I grew up. I am looking at a few towns such as Oakbrook, Clarendon Hills, La Grange, and LaGrange Park. But I'm open to other cities. I decided that I am going with a 3.5% or 5% FHA loan and owner occupy one unit for a year. I plan to look at a turnkey, and slight value add deals.

When it comes to multi-family, I am a little less knowledgeable about what is a "good or great deal." or what you should account for when it comes to expenses.

My question is, where do I start when looking for a "good or great deal" and what are the signs that a deal is right. All of that is subjective and based on my own risk and reward balance. But in a general sense, what should I stay away from?

Thanks!

Most Popular Reply

User Stats

2,737
Posts
1,699
Votes
Crystal Smith
  • Real Estate Broker
  • Chicago, IL
1,699
Votes |
2,737
Posts
Crystal Smith
  • Real Estate Broker
  • Chicago, IL
ModeratorReplied
Originally posted by @Jacob Dawson:

Hey guys, a little background before my question: 

I am 21 years old, and I live in the Chicago suburbs. I am currently a commercial real estate broker specializing in retail, and so far, I have made roughly $25,000. I am looking to invest some or all of that money into an investment property in the Chicago suburbs. I am looking to buy in the western suburbs where I grew up. I am looking at a few towns such as Oakbrook, Clarendon Hills, La Grange, and LaGrange Park. But I'm open to other cities. I decided that I am going with a 3.5% or 5% FHA loan and owner occupy one unit for a year. I plan to look at a turnkey, and slight value add deals.

When it comes to multi-family, I am a little less knowledgeable about what is a "good or great deal." or what you should account for when it comes to expenses.

My question is, where do I start when looking for a "good or great deal" and what are the signs that a deal is right. All of that is subjective and based on my own risk and reward balance. But in a general sense, what should I stay away from?

My opinion on what you should stay away from:

  • A property that will have a negative cash flow if fully occupied. This seems like a brilliant grasp of the obvious but...  Even if fully occupied make sure you include the vacancy rate as part of your calculations. Even if it cash flows does the property hit your Return on Investment target? If it doesn't hit the target then stay away
  • A property that does not have enough sold comparables within the last 6 months to support the purchase price- If there's aren't enough comparables then be prepared to have to put in more $ to acquire because the appraisal is going to come in lower than expected
  • A property that doesn't have enough rental comparables to support the your expectations for rent
  • Don't stay away from this but play close attention to what type of tax exemption on it. If it's owner-occupied by a senior citizen then you will have to rerun your numbers assuming your taxes will go up. Unlesss, of course, you are a senior citizen.

My bullets on what to stay away from really apply to any location. It's not a function of the Chicago suburbs.

  • Crystal Smith
  • 3126817487
  • Loading replies...