Tips for Beginner Looking for Small Multi-Family in Chicagoland

[Adam Bandola]

Hello everyone! 

I'm Adam Bandola, a 22-year old recent college graduate who's looking to be get started in small multi-family units in the Chicagoland area. Having lived around Chicago my whole life, the dream is to work and live in and around the city in the near future. 

That being said, real estate investing and the concept of house-hacking has only been in my life for the past 6-8 months. Although I've been reading BP books (as well as others), listening to podcasts and doing my own analyses on properties that are currently on the market, I would still appreciate if any investors in the Chicagoland area have any tips or would be able to answer some questions I have. 

Specifically:

• - How did you get your start in Chicago?
• - Is it worth it to purchase a duplex, triplex, fourplex in a worse neighborhood for cheaper? My gut is saying it would not be given that there's a higher likelihood for property crimes, vacancy, a generally worse pool of tenants to choose from and, ultimately, less income from a lower rent. However my brain is saying that if the numbers work and it cash flows even for a couple hundred dollars then it may be worth it to inspect further. 
• - Are there any neighborhoods to completely avoid besides the Englewood, Garfield Park areas? I know all too well that certain streets can make a difference. 
• - What tactics have you used to determine if an area is up-and-coming and worth it to buy in earlier?

Thank you to those who have read and a thank you to those that are able to provide any guidance. If you have any tips in general I would love to read them. I look forward to seeing the power of the BP community. 

[Paul De Luca]

@Adam Bandola

Welcome to the forums, Adam!

- I started by house hacking a 2-flat in Berwyn. Then I bought a second one the following year, which I'm still in now and the plan is to get another one this year. The FHA self sufficiency test can be difficult to overcome for 3-4 units depending on the location. One way investors get around this is by buying a legal 2-flat with a finished basement or attic unit, so you have 3 units in total.

-It depends on what your goals are, what areas you're willing to live in, and what you can afford. Personally, I wouldn't house hack in an area I don't feel safe. 

-You mentioned a few areas that aren't exactly house hack friendly. Many new house hackers I work with either look toward NW Chicago neighborhoods or the western suburbs like Berwyn, Aurora, Elgin, etc.

-You can keep your finger on the pulse of where other investors are buying by being here on the Chicago forums. An easy way to anticipate up and coming areas is to look at the areas that are hot/expensive and buy on the outskirts of those areas. Buy on the fringe of a good neighborhood, hold, and wait for the natural expansion of the city to run its course. You can also look at other important things like population/job growth, ease of access to public transportation, and government projects.