Rented Brick 3-Unit with 18%+ Cap Rate in Chicago Heights

[Fernando Angelucci]

Today we have available for immediate assignment a brick and frame 3-unit at a 18.8% cap rate in Chicago Heights for $135,000. It has the potential to be a 23% cap rate!

320 W. 16th St., Chicago Heights, IL 60411 is nestled in a residential area only a few blocks away from the Barack Obama School of Leadership and Technology. The property is in need of no required rehab as 2 out of 3 units are rented and the third vacant unit is being left vacant for the new owner's convenience. One of the units is 4 bedrooms and 2.1 baths and is currently rented to a Section 8 tenant for $1,450 a month. The other two units are 1 bedroom, 1 bath with the occupied unit rented to a market tenant at $650 a month. We would recommend renting the vacant 1 bedroom to a Section 8 tenant as there is a shortage of Section 8 housing and one bedrooms in 60411 can command $890 a month from voucher tenants. Tenants currently pay all utilities except for water and common area electric. Tenants have their own individual trash cans with the city.

CURRENT FINANCIALS

Gross Operating Income (at current 4 bedroom Section 8 unit, and two 1 bedroom market renters): $33,000

Estimated Annual Taxes: $5,075.30 (Based off 1st installment of 2016 as $2,537.65)

Actual Annual Insurance: $675.31 (Country Financial)

Owner Paid Utilities: $160 (Water and common area electric; water is billed every two months and has averaged at $262 (per 2 months) over the past 4 years)

Total Annual Expenses: $7,670

Net Operating Income: $25,330, 18.8% Cap @ $135k

PROFORMA FINANCIALS

Rent vacant 1 bed unit to Section 8: $28,210 NOI, 20.9% Cap @ $135k

Rent both 1 bed units to Section 8 when lease expires 7/17: $31,090 NOI, 23% Cap @ $135k

Here are the documents to support the reported expenses: https://www.dropbox.com/sh/8t7c6233bozbc7i/AAAOi4uT7a-VLHI56IpP_KLja?dl=0

PHOTOS: https://www.dropbox.com/sh/o4mm09xue7wk43f/AAAMCpYJ0L7dF43bvDiQYZfga?dl=0

There are no comparable sales in the past 12 months but with its rate of return, it will pay for itself in 5 years.

We will set up a showing for all interested parties unless the property sells sight unseen. The deal goes to the first person to sign the assignment of contract and remit the assignment fee. Please let us know if you have any questions or interest.

Cheers!