Strategy for Chicago Multi-Family Market at 6%+ Interest Rates?

[Demetrius Davis]

I'm pivoting from Chicago SFH investing to multifamily (South Side), but I wish I had arrived to the party 6 months earlier. With investor mortgage rates above 6% plus points, prices on the South Side barely meeting the 1% rule, property tax increases, and the prospect of even higher rates if a cash-out refi is done on a value-add MF 6 months from now, how are you playing the Chicago multi-family market currently? Are you continuing to pursue deals? Are you waiting for a fall/winter price cool down? Are you waiting for bigger dips?

[Jake Fugman]

@Demetrius Davis If you are already looking at 4 units it might be a good idea to dive into 5-6 unit MF or smaller mixed use - if you can afford it. That way you aren't competing with FHA or residential buyers. Typically CAP rates are better in these asset classes AND commercial financing rates are still in the low 5's - which equals better CoC%. You sacrifice the 30 yr fixed rate, but you have the motivation to steadily add value before loan is due in 5,7, 10 yrs.