New Investor from Chicago - 1st Rental

[Demetrius Davis]

I have been following the BiggerPockets podcast and grabbing advice from the site for over 6 months.  I have finally decided to join the site.  Last week my wife and I closed on our first rental property!  It came on the heels of 500+ hours of research, deal analyses, property visits, and offers.  I believe we offered unsuccessfully on 6 other properties before getting this one.  We now own a 2/1 condo in the Bronzeville neighborhood of Chicago.  It was a cash deal, but we are on the fence about whether we will seek to leverage this property to fund our next deal or save up cash (6 months) before buying the next one all cash.  Could use some advice here.

We are in the beginning stages of the condo renovation, leveraging a good contractor that we have used for our home.  He does great work, however we would love a referral for a good electrician, tile person, painter for future projects.  Our goal is to have the renovation done by the end of April, then have the property rented by June 1.  

Im looking for tips for a first time buy/hold investor, as I would like to avoid costly mistakes.  One of my big questions is related to the level of renovation to put into the condo.  Many of the other units in my building including owner-occupied, and recent rentals have black refrigerators, laminate countertops, and basic light fixtures, however, Bronzeville rents appear to be rising and there are many units in the neighborhood with better finishings.  I'm wondering if I should spend the extra $1,500-2000 to have nicer finishings in my unit and if this will attract higher rent and higher quality tenants.

Other than that, I'm here to connect with and learn from Chicagoland investors to tap into best practices for investing in Chicago and surrounding suburbs. 

[Account Closed]

@Demetrius Davis

Leverage will largely be a personal decision. This will be determined by your overall financial picture, desire to grow, comfort level of risk etc. Evaluating each option side by side if you leverage versus not and how that gets you to where you want to go and comparing them would be a good starting point. There is not one that may be right or wrong but what fits your model. If the extra return for upgraded finishes is worthwhile then maybe . If will be relevant to what additional rent. If you can spent 1500 to get an extra 125 a month sure. If you need to spend 10k to get 50 extra a month.... maybe not. You will also want to compare this ROI computation relative to obtaining another investment ( your next property) because the money may be used more efficiently there. Maybe wait to get this one rented , going through tenant selection etc as that may help you on the next purchase based on the feedback you get from the renter.

Good luck .