Deal Diary: Flip $130k to $450k - 2 unit in Little Village Chicago

[Henry Lazerow]

Before:

After: 

When we bought the building, it had a tenant who needed to be evicted with big nasty dogs. We ended up paying him $2500 to leave, as did not want to wait the whole 8 months for an eviction.

Purchase: $135k

Sold: $450k. Original expected ARV was $400k. Redfin has Little Village growth at 10.6% in last 12 months so we got lucky on that end and our ARV was very accurate prior to the last 12 months of appreciation. Ran MLS comps to determine.

Rehab costs: Prefer not to share on a public forum.

Financing: Did a 25% down rehab loan that was at 9% and 2.5 points from a local bank. I also used my HELOC from another property for most of the downpayment so really did the deal with close to $0 out of pocket. My heloc is at 8.5%.

Scope of rehab: Kitchens/baths/flooring/paint. The basics to make it nice and rent ready, kept unit layouts the same. Some new windows, gutters, new garage door, motor, etc. Everything was beat up from decades of being a rental prior. 

We rented the 3/1 garden unit for $1720. I have the top unit 3/2 as a rental listing now from the new owner and have had a ton of inquiries 30+ for $2250. Rents in Little Village have gone WAY up especially if you do a nice rehab. A few years ago I would never of imagined 2 units at nearly half a million and demand for rentals going over $2000+ in Little Village. Probably will be over $500k next year, Brighton Park 2 units (neighborhood next over) are already now breaking $500k mark. The whole SW side is gentrifying rapidly. Looking at a 6 unit in area now for the my next one, this one a BRRR to hold onto long term.

[Henry Lazerow]

It was Town Center Bank. I heard good things about Lakeside Bank though!