South Chicago multifamily apartment market

[Wai Chan]

I have invested in both Dallas and San Diego but I am now looking for area with better return. I have just started studying the South Chicago multifamily apartment market. I have looked at a few deal (6 units+) around U. of Chicago (zip code: 60649, 60637). It seems that almost all deal can achieve 10% cap rate with 20%+ cash on cash return. The number on paper looks pretty good. However, I am not sure the turn over rate and rental demand on these area. I have just read the report from Freddie Mac and it seems that the vacancy is pretty low and the rent increase is decent (http://www.freddiemac.com/multifamily/pdf/mf_2017_...)

Also looks like rent in South Chicago is pretty low. I see the average rent/sq ft runs about US 0.5/0.6. You pay only about US1100/month for a 2000 sq ft 3 bedroom 2 bathroom apartment or US650 for a 2 bedroom/1 bathroom. That sounds extremely affordable taken into account that minimum wage will increase to US13/hour in 2019. Looks like to me risk is low for rental.

A few questions I have in mind:

1. I have heard a lot of bad stories about South Chicago so I want to make sure I am picking the right zip code.  Could you share some area which I should look at? Good cap rate but also a small appreciation over years? I am not looking at the best cap rate as I don't want to deal with very bad neighborhood.

2. What size of apartment is the easiest to rent out? 2 bedroom/1bathroom?  

3. How do I calculate the property tax in Chicago? Is there way I can find the tax rate for different zip code?

4. What would be other big expense beside property tax? Is insurance expensive in Chicago?

5. Anything I need to be careful or take into account of when investing MF in South Chicago?

Thanks in advanced.