Trying To House Hack In Chicago...Help!

[Jeremy Margaritondo]

tl;dr: Total noobs looking to house hack in a Chicago north side hood. Need advice and a good agent :)

Hello BiggerPockets!

It’s been awhile since I first joined the BiggerPockets community with grand real estate investing ambitions. A lot has changed since then, and it’s finally time to take the plunge.

My wife and are planning to make a move from San Francisco to Chicago. We’d like to try and buy something and were thinking of looking for a small multifamily property as opposed to a single family home.

We are complete noobs when it comes to real estate investing. I’ve read tons of books, I think I’ve probably read “The Book on Rental Property Investing” three times now, so I have a basic understanding, but not much past that.

Our ultimate goal is to find a place we can live in for 1-5 years and hopefully hold on to as a long term investment when we are ready to move on. We’re not looking for high cash flow, but the place should at least be able to break even when we move out.

Here’s what we were thinking:

• Type: 2 - 4 units
• Neighborhoods: Bucktown, Wicker Park, Roscoe Village, or similar
• Price Range: We’d like to cap our initial cash investment at $250,000. That would include down payment, closing costs, rehab, and any other up front costs.
• Timeline: In an ideal world we’d be all moved in 6 months from now, but we are flexible. I don’t want to pounce on a bad deal just to hit that mark.

I’ve started our search by scanning through and quickly analyzing properties I’ve found on sites like LoopNet, Realtor.com, and Redfin. I’ve come to two conclusions:

1. This is going to be really hard to find. The rents don’t seem to come close to covering mortgage and taxes (holy sh** taxes are high), let alone all of the other costs. We may need to get creative.
2. We’re going to need a good realtor :)

Anyway, we have so many questions, too many for one post, so I’ll limit myself to two.

1. Any recommendations on a good agent?
2. Any thoughts or advice from anyone with multifamily experience in these neighborhoods?

Excited to start this journey and hopefully make some good friends here on the BiggerPockets forums along the way!

[Zack Karp]

@Jeremy Margaritondo also not just the loan limits like @Brie Schmidt mentioned, but you also need to be aware of the required down payment percentages (LTV). For example, a 2-unit only requires a 15% down payment, but 3-4 unit properties require a 25% down payment. So if you are looking at properties needing work, and that 250K is also budgeted for rehab, this might come into play.

Also, there is a program called Home Possible where you can buy a 2-4 unit property with as little as 5% down using Conventional financing.  There are income limits to this program, unless the property is in an underserved area.

I'm actually helping another BP member right now on this exact thing, he found a $631,000 3-unit on the NW side in an underserved area and is buying it with only 10% down.

If you have any questions, feel free to reach out, happy to answer any questions you might have because there are a lot of nuances and guidelines that the average person has no idea about.

And btw, @Brie Schmidt is an awesome investor-friendly realtor, since you were asking.  You would be in great hands with her.

Best of luck!