Chicago Duplexes Costing Models

[Matt Michaels]

Hello BP community!

Quick background to provide context. I am a multi-family real estate investor currently living in the Pittsburgh area. I bought my first duplex in 2018 and house hacked it, and then moved to my second duplex in 2019 and am currently house hacking that.

However, my situation is changing as my long-time GF is from the Chicago area and we are moving back to the Chicago-land area in the future. With that being said I would like to continue my multi-family investing career but was looking for advice going into a new market (Chicago).

If you are a multi-family investor in the Chicagoland area, can you provide advice on unplanned expenses or different ways to think about multi-family deals and deal structuring in the Chicagoland area? Further and if you would feel comfortable, sharing your costing sheet/analysts model when analyzing multi-family deals in Chicagoland?

Thank you in advance for your time, and I look forward to hearing back from you!

Matt

[Lee Nestlerode]

I sold my duplex about 3 years ago but still follow the market in hopes of another slowdown. The land values can be crazy, make sure to understand what is driving prices in your micro-market. As stated above really is block by block. My area was completely driven by the price a developer could get for a single family house they would then back into what they could pay for a tear down or rehab which provided a floor on price. They would then go door to door with flyers to acquire houses, so many never hit the MLS. I would suggest looking for a 3 flat if you can find one.

1/watch out for taxes, they are increasing rapidly, so make sure you have the latest info And build increases into the model. This is posted on the county site.

2/ deferred maintenance can be costly, old boilers can go at any moment and flat roofs are expensive.  old windows can really drive up heating costs.  you will be dealing with houses that are 120+ years old.

3/be on the look out for asbestos, there’s a bunch of it used on pipes, fire proofing and tile floors.

I had a great agent and real estate attorney, happy to share there info if you are interested.