REAL ESTATE NEWBIE: SPLITTING TIME BETWEEN CHICAGO & LA...ANY ADVICE?

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REAL ESTATE NEWBIE: SPLITTING TIME BETWEEN CHICAGO & LA...ANY ADVICE?

LaRon Phillips
Chicago, IL · Member since 2014 · 7 posts · 3 votes

Greetings BP'ers! Over the last few years I've done some "career hacking" to find a better work/life balance for myself. Well I've achieved that goal after 7 years! I've gotten things to where I can work from anywhere as long as I have an internet connection. I've always wanted to split-time between my 2 favorite cities: Chicago in the spring/summer and LA during the winter months of course! Since the job situation no longer requires me to be rooted in any particular place I started to think that maybe I can make my dream scenario of a bi-coastal lifestyle a reality (I know that Chicago isn't technically "coastal" but you get the point! lol). I'm currently renting here in Chicago and I have another year on my lease but next spring I plan to purchase my first property. I'm a total newbie to real estate so this would be my jumping off point. So over the next year I want to take the time and formulate a decent REI plan and make this happen in a way that allows for solid growth financially. So naturally, I'm turning to the Bigger Pockets collective brain for ideas, strategies, life hacks, etc that would make the most sense as I put the pieces together. I'm trying to figure out where the blind spots are in terms of logistical challenges that may arise going forward. Any advice/constructive criticism is all greatly appreciated. Thanks!!

GOAL/IDEA

  • Buy my first property here in Chicago.
  • While in LA I would find a short term rental there and rent out my place in Chicago using airbnb or short-term corporate rental, etc and find a property management company. The mortgage in Chicago would be covered by my renters which would essentially allow me to avoid paying for 2 places at once when I’m in LA. I’m thinking that renting in LA would be more cost effective due to the super high cost of property there…but this is coming from my limited knowledge of the market there.

QUESTIONS

  • Does it make more sense to buy in Chicago and rent in LA or buy in both places?
  • What type of property is best to buy in this situation (e.g. condo, townhouse, 1BR, 2BR, etc)?
  • What areas of Chicago would it make the most sense to consider for property purchase?
  • What are some of the logistical/financial blindspots that you all see or that I should anticipate?
  • Have any of my fellow BP’ers had any experience in pulling off something like this?
  • Is this plan realistic? lol

Thanks everyone…wish me luck!

-LP

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  • Crystal SmithPro Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2014 · 2k+ posts · 1k+ votes
    11y
    Originally posted by @LaRon Phillips:

    GOAL/IDEA

    • Buy my first property here in Chicago.
    • While in LA I would find a short term rental there and rent out my place in Chicago using airbnb or short-term corporate rental, etc and find a property management company. The mortgage in Chicago would be covered by my renters which would essentially allow me to avoid paying for 2 places at once when I’m in LA. I’m thinking that renting in LA would be more cost effective due to the super high cost of property there…but this is coming from my limited knowledge of the market there.

    QUESTIONS

    • Does it make more sense to buy in Chicago and rent in LA or buy in both places?
    • What type of property is best to buy in this situation (e.g. condo, townhouse, 1BR, 2BR, etc)?
    • What areas of Chicago would it make the most sense to consider for property purchase?
    • What are some of the logistical/financial blindspots that you all see or that I should anticipate?
    • Have any of my fellow BP’ers had any experience in pulling off something like this?
    • Is this plan realistic? lol

    Great question.  While I can't address whether it makes sense to rent or buy in LA, I can address whether it makes sense to buy in Chicago.  Before getting our place in Chicago we commuted between Atlanta & Chicago & used B&B's in Chicago.  Every B&B was booked thru Air B&B.  If I was in your shoes I'd choose a townhouse with 2BR.  When you're not in Chicago you can make the whole townhouse available & increase the pool of potential tenants.  In the right location the townhouse will never stay vacant.  Then you can choose to only make 1 BR available while in Chicago.  Regarding location it should be close to the trendy areas within walking distance or short cab ride of restaurants/entertainment..... Since your from Chicago I won't go in to where those trendy areas are.

    312-681-7487
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  • Paul Timmins
    Specialist · Rockland, MA · Member since 2010 · 7k+ posts · 2k+ votes
    11y

    @LaRon Phillips 

    Welcome. Time to build the foundation below.

    Check out the Start Here page http://www.biggerpockets.com/starthere

    Check out BiggerPockets Ultimate Beginner's Guide - A fantastic free book that walks through many of the key topics of real estate investing.

    Check out the free BiggerPockets Podcast - A weekly podcast with interviews and a ton of great advice. And you get the benefit of having over 100 past ones to catch up on.

    Two Great reads, I bought both J. Scott The Book on Flipping Houses,The Book on Estimating ReHab Costshttp://www.biggerpockets.com/flippingbook

    Locate and attend 3 different local REIA club meetings great place to meet people gather resources and info. Here you will meet wholesalers who provide deals and all the cash buyers (rehabbers) you will need.

    Consider checking out HUD homes for small multi's owner occupied gets first crack.

    You might consider Niche or Specialized Housing like student housing. Rents can be 2-4 times more. Remember you don't have to own a property to control it.

    Download BP’s newest book here some good due diligence in Chapter 10. Real Estate Rewind Starting over

    http://www.biggerpockets.com/files/user/brandonatbp/file/real-estate-rewind-a-biggerpockets-community-book

    Good luck

    Paul

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  • Lumi Ispas
    Real Estate Consultant · Chicago, IL · Member since 2014 · 720 posts · 439 votes
    11y

    @LaRon Phillips , @Crystal Smith has gave you a good solution. The other would be to buy a 2-4 unit building with an in-law apartment in Chicago.  Keep the basm unit for yourself and rent all the other units. Basement might sound crazy, however I've seen some redone amazingly.

    Regarding LA, the return on rentals I heard is very low, so you could my the smaller property on the best block, so your cost is low and chances of appreciation high, or just rent something while in LA. 

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