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Updated almost 11 years ago on . Most recent reply

User Stats

227
Posts
31
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Samson Kay
  • Investor
  • Chicago, IL
31
Votes |
227
Posts

My Agent just told me a 4 family owner occupied in Chicago is impossible to cash flow (if you don't own a flak jacket.)

Samson Kay
  • Investor
  • Chicago, IL
Posted

Two trips to chicago, and 14 showings later, my agent dropped this little bomb on me.

"Given your commute and this market, a 3-4 unit building isn't going to cashflow enough to cover your whole "nut", you're going to have to come up with money each month."

Now, where I'm from, I'm used to rents being high enough to at least cover the mortgage and all my expenses, even if I have to pay a little out of pocket each month. But all the properties that I've seen in chicago, with the taxes being so high, and with landlords paying things like heat and water, the buildings only cashflow enough to cover operating costs. Meaning I would have to pay 2-3K out of pocket and thats assuming I rent out the entire building and dont live in a unit.

If thats the case, whats the point of buying a owner occupied multi in chicago? I get that prices for a 3-4 family in a desirable neighborhood will demand higher prices, but if the rents don't justify the asking price, why would anyone consider purchasing there? I'd rather pay 500K for a single family in the same neighborhood and not deal with tenants if I didn't make enough to at least cover debt service and taxes and insurance.

Feeling frustrated. :/

My agent thinks I need a new strategy. What do you guys think?

Most Popular Reply

User Stats

2,267
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540
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Mike Hurney
  • Real Estate Investor
  • Boston, MA
540
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2,267
Posts
Mike Hurney
  • Real Estate Investor
  • Boston, MA
Replied

@Samson Kay "Given your commute and this market, a 3-4 unit building isn't going to cashflow enough to cover your whole "nut", you're going to have to come up with money each month."

I read this as: You are not on their "A" list!

"My agent thinks I need a new strategy. What do you guys think?"

I think you need a new agent!

Downtown Boston, Massachusetts is expensive so folks move towards the suburbs for less expensive opportunities (but lower rent, so you or your new agent have got to find a balance that works.

  • Mike Hurney
  • Loading replies...