6-12 Unit Multifamily Investment Locations In Illinois

Chicago, Illinois
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6-12 Unit Multifamily Investment Locations In Illinois

Linh Khuc
Member since 2022 · 29 posts · 7 votes

Hi All,

I've been looking into multifamily investment property (6-12 units), been looking in the Chicago neighbors, western suburbs, dug into information such as population, income, job growth, crime rates, rent vs homeowner ratio....found these facts.

Chicago neighbors, west sides (Maywood, Berwyn, Cicero, Austin, Chicago Heights, Little Village) have higher rent vs home owner ratio, higher crime rates, lower average income, more building available for sale compared to the western suburbs (Aurora, Plainfied, Elgin, Joliet, Rockford). 

With that said, between west side Chicago neighbors and Western suburbs, each of them has pros and cons, the catch is hard to find a multifamily property (6-12 units) in the suburbs compared to west side Chicago, does it mean this is a good sign for the western suburbs ? 

Any investors have any thoughts about better location to invest in those neighbors ? 

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John Warren
Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
4y

@Linh Khuc you are lumping quite a few neighborhoods together that are not at all the same class of neighborhood. For instance, you put Berwyn right next to Austin and Maywood... Berwyn recently got a second Starbucks so I am not sure you are looking at the right metrics here. 

There are definitely deals still out there in the 6-12 unit space, but there is less meat on the bone than there was four or five years ago. Many of the Chicago suburbs also have compliance inspections when a property sells which can add complexity for a newer buyer (an annoyance for an experienced buyer). You are almost definitely taking this on as a new buyer since all sellers want to avoid the frustrating repairs that come from these. 

Personally, I think the near western burbs are one of the better places to invest although there are no "easy" places to find deals right now. 

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  • Paul De Luca
    Real Estate Agent · Chicago, IL · Member since 2018 · 1k+ posts · 1k+ votes
    4y

    @Michael J Scanlon @Jake Fugman

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  • Mateo Carrera
    Melrose Park, IL · Member since 2015 · 88 posts · 30 votes
    4y

    Yeah that is correct. Its just hard to find multi fam apartments for sale at reasonable rates or for sale at all. In those areas. 

    0Reply
  • John Warren
    Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
    4y

    @Linh Khuc you are lumping quite a few neighborhoods together that are not at all the same class of neighborhood. For instance, you put Berwyn right next to Austin and Maywood... Berwyn recently got a second Starbucks so I am not sure you are looking at the right metrics here. 

    There are definitely deals still out there in the 6-12 unit space, but there is less meat on the bone than there was four or five years ago. Many of the Chicago suburbs also have compliance inspections when a property sells which can add complexity for a newer buyer (an annoyance for an experienced buyer). You are almost definitely taking this on as a new buyer since all sellers want to avoid the frustrating repairs that come from these. 

    Personally, I think the near western burbs are one of the better places to invest although there are no "easy" places to find deals right now. 

    2Reply
  • Jonathan KlemmBusiness Member
    Moderator
    Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes
    4y

    Hey @Linh Khuc - Your overall assessment is pretty spot on.  I personally prefer the near Chicago Western Suburbs like Berwyn & Cicero.  Cicero still has access to the Chicago Pink like which I really like and if they ever extended it Berwyn would too.  These areas have solidly built structures and good cash flow.

    I am from Elgin and believe its also a good cash flow market, however, inventory is even more limited which is why I just prefer investing closer to the city.

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  • Crystal SmithPro Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2014 · 2k+ posts · 1k+ votes
    4y
    Quote from @Linh Khuc:

    Hi All,

    I've been looking into multifamily investment property (6-12 units), been looking in the Chicago neighbors, western suburbs, dug into information such as population, income, job growth, crime rates, rent vs homeowner ratio....found these facts.

    Chicago neighbors, west sides (Maywood, Berwyn, Cicero, Austin, Chicago Heights, Little Village) have higher rent vs home owner ratio, higher crime rates, lower average income, more building available for sale compared to the western suburbs (Aurora, Plainfied, Elgin, Joliet, Rockford). 

    With that said, between west side Chicago neighbors and Western suburbs, each of them has pros and cons, the catch is hard to find a multifamily property (6-12 units) in the suburbs compared to west side Chicago, does it mean this is a good sign for the western suburbs ? 

    Any investors have any thoughts about better location to invest in those neighbors ? 



    It's the nature of big cities with dense populations to have more apartment buildings than the suburbs. This would include suburbs that are right on the edge of the city.  So finding that there's more available on the Near West Side than the far western suburbs isn't surprising.  You'll find this in every major metropolitan area, New York, Atlana, LA,.....
    312-681-7487
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  • Linh Khuc
    OP
    Member since 2022 · 29 posts · 7 votes
    4y
    Quote from @John Warren:

    @Linh Khuc you are lumping quite a few neighborhoods together that are not at all the same class of neighborhood. For instance, you put Berwyn right next to Austin and Maywood... Berwyn recently got a second Starbucks so I am not sure you are looking at the right metrics here. 

    There are definitely deals still out there in the 6-12 unit space, but there is less meat on the bone than there was four or five years ago. Many of the Chicago suburbs also have compliance inspections when a property sells which can add complexity for a newer buyer (an annoyance for an experienced buyer). You are almost definitely taking this on as a new buyer since all sellers want to avoid the frustrating repairs that come from these. 

    Personally, I think the near western burbs are one of the better places to invest although there are no "easy" places to find deals right now. 

    John, 
    Thank you for your feedback and the neighborhoods I listed was not in order, it was randomly when I wrote the thread and you're correct, you've brought up a good point and I noted it in terms of neighbor class, I prefer investing in class A, B neighbors. 
    The western suburbs is more of my focus, all the neighbors I mentioned are class A, B.  I was trying to expand my search to Chicago neighborhoods to see if I can find anything since the western suburbs are hard to find but I always can wait for the opportunity to come. 

    0Reply
  • Linh Khuc
    OP
    Member since 2022 · 29 posts · 7 votes
    4y
    Quote from @Jonathan Klemm:

    Hey @Linh Khuc - Your overall assessment is pretty spot on.  I personally prefer the near Chicago Western Suburbs like Berwyn & Cicero.  Cicero still has access to the Chicago Pink like which I really like and if they ever extended it Berwyn would too.  These areas have solidly built structures and good cash flow.

    I am from Elgin and believe its also a good cash flow market, however, inventory is even more limited which is why I just prefer investing closer to the city.


     Johnathan,

    Thank you for feedback and you are correct, this is the reason why I expanded my search, my initial target has been the western suburbs and would like to expand my search to the city, I'll keep exploring Berwyn and Cicero, I'm using Crexi, found 3 buildings listed for sale in Berwyn, need to do more DD, too new to jump on it at this point. 

    0Reply
  • Linh Khuc
    OP
    Member since 2022 · 29 posts · 7 votes
    4y
    Quote from @Crystal Smith:
    Quote from @Linh Khuc:

    Hi All,

    I've been looking into multifamily investment property (6-12 units), been looking in the Chicago neighbors, western suburbs, dug into information such as population, income, job growth, crime rates, rent vs homeowner ratio....found these facts.

    Chicago neighbors, west sides (Maywood, Berwyn, Cicero, Austin, Chicago Heights, Little Village) have higher rent vs home owner ratio, higher crime rates, lower average income, more building available for sale compared to the western suburbs (Aurora, Plainfied, Elgin, Joliet, Rockford). 

    With that said, between west side Chicago neighbors and Western suburbs, each of them has pros and cons, the catch is hard to find a multifamily property (6-12 units) in the suburbs compared to west side Chicago, does it mean this is a good sign for the western suburbs ? 

    Any investors have any thoughts about better location to invest in those neighbors ? 



    It's the nature of big cities with dense populations to have more apartment buildings than the suburbs. This would include suburbs that are right on the edge of the city.  So finding that there's more available on the Near West Side than the far western suburbs isn't surprising.  You'll find this in every major metropolitan area, New York, Atlana, LA,.....

     Crystal,

    Thank you for your feedback and your point is dead on, couldn't agree more, this will help my search narrowed down. 

    0Reply
  • John Warren
    Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
    4y

    @Linh Khuc glad I could help. Keep looking near star bucks and Chipotle. That is the way I identify a B class neighborhood these days. If you don't see these types of big box places, you are probably in a C class area. 

    1Reply
  • Chris P.
    Member since 2022 · 12 posts · 5 votes
    4y

    I’ve also been looking for some multi family units and they hardly ever come up. What’s everyones thoughts on Westmont, Darien and Willowbrook?

    0Reply
  • Linh Khuc
    OP
    Member since 2022 · 29 posts · 7 votes
    4y
    Quote from @Chris P.:

    I’ve also been looking for some multi family units and they hardly ever come up. What’s everyones thoughts on Westmont, Darien and Willowbrook?

    How long you've been looking ? I think they are just like anywhere else in the western surburbs, hard to find multi family but they'll pop up here and there. 

    0Reply
  • Linh Khuc
    OP
    Member since 2022 · 29 posts · 7 votes
    4y
    Quote from @John Warren:

    @Linh Khuc glad I could help. Keep looking near star bucks and Chipotle. That is the way I identify a B class neighborhood these days. If you don't see these types of big box places, you are probably in a C class area. 


     John,

    Would Niche be a good source to identify class B, C....neighborhood ? 

    0Reply
  • Chris P.
    Member since 2022 · 12 posts · 5 votes
    4y
    Quote from @Linh Khuc:
    Quote from @Chris P.:

    I’ve also been looking for some multi family units and they hardly ever come up. What’s everyones thoughts on Westmont, Darien and Willowbrook?

    How long you've been looking ? I think they are just like anywhere else in the western surburbs, hard to find multi family but they'll pop up here and there. 

    I’ve been looking hard for the last 1-2 months. Made an offer on a 4plex in Westmont last weekend, but didn’t get it. It’s tough finding one, nonetheless finding one where the numbers work. 
    0Reply
  • John Warren
    Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
    4y

    @Linh Khuc the A, B, C, D classifications are definitely subjective. It really comes down to what type of tenants are in an area. Are the tenants primarily high income earning white collar tenants? You are in an A class area. Are the tenants primarily middle class income earners? You are probably in more of a B. Are you dealing mostly with lower paid working class? You are in a C area. If you have trouble collecting rent and the areas is rough, you are likely in a D area. 

    You can look up census tracks to find this info, or you can just look at the restaurants and stores in an area to determine who they serve. 

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