What Are Your Top Chicagoland Investment Areas For 2022?

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What Are Your Top Chicagoland Investment Areas For 2022?

Sean McKee
Rental Property Investor · Chicago, IL · Member since 2017 · 268 posts · 189 votes

Hello fellow Chicagoland investors!

2021 has been quite the year for real estate. Competition has been fierce for residential property and deals are hard to come by. I'm sure a lot of us got more creative and worked a bit harder to find deals that work. As 2022 approaches, what markets within the Chicagoland area have caught your interest? Where do you see the most opportunity? Have you had to adjust your investment approach?

I know I have started to set my eyes on Northwest Indiana and have found myself considering areas in Chicago that weren't on my radar 5 years ago.

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Jake FugmanBusiness Member
Real Estate Broker · Chicago, IL · Member since 2016 · 256 posts · 250 votes
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@Sean McKee Like throughout most of the country, turn key single family rentals have been very hard to come by. Suburbs south of Chicago (Homewood, Hazel Crest, Matteson, etc) that had solid <$150k inventory 2-3 yrs ago now have very few properties that pencil out. Instead of trying for SFR in the $100-150k range Im finding it makes more sense to look at multifamily buildings on the far NW or SW side that are around the same price per door. If you can find properties in areas or condition(s) where you dont have to compete with FHA house hackers deals can still be found. Portage Park, N. Austin, Little Village, S. Woodlawn, Brainard all come to mind.

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  • Jake FugmanBusiness Member
    Real Estate Broker · Chicago, IL · Member since 2016 · 256 posts · 250 votes
    4y

    @Sean McKee Like throughout most of the country, turn key single family rentals have been very hard to come by. Suburbs south of Chicago (Homewood, Hazel Crest, Matteson, etc) that had solid <$150k inventory 2-3 yrs ago now have very few properties that pencil out. Instead of trying for SFR in the $100-150k range Im finding it makes more sense to look at multifamily buildings on the far NW or SW side that are around the same price per door. If you can find properties in areas or condition(s) where you dont have to compete with FHA house hackers deals can still be found. Portage Park, N. Austin, Little Village, S. Woodlawn, Brainard all come to mind.

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  • Jonathan KlemmBusiness Member
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    Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes
    4y

    @Sean McKee - I completely agree with you, deals right now are hard to find.  That is probably only going to stay true going forward as inflation rises.

    I have also seen a lot of Chicago investors looking toward nw indiana, but I still think Chicago is a great market.  If you can find any multi-family properties near an "L" station it's naturally going to appreciate over time.  The NW side of the city along the blue line will always be a great place to buy long-term if you can afford it and the lack of cash flow.

    Neighborhoods I like are some of the same as @Jake Fugman.  Woodlawn, South shore, Carneyville, Portage Park, Hermosa, and Cicero & Berwyn on the Westside by @John Warren

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  • Michael K.
    Investor · Chicago, IL · Member since 2018 · 352 posts · 176 votes
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    I like the Pink and Orange Line Neighborhoods. The farther west you go the easier to cash flow, Bridgeport is probably the worst for cash flow but makes up for it by being a nice place to live. Over the past year, clients have been taking me to the southside a lot more frequently. I like east of 90/94 up to Jackson park. There are also pockets further south and west where you can find some really nice buildings well within the 100k/unit rule. Just make sure you pick a block that looks like it's well cared for, and not a block that looks like it's been bombed out.

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  • John Warren
    Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
    4y

    @Sean McKee 2021 has been a little tighter in terms of inventory than years past, but there are still definitely deals out there. Rents are getting ready to increase this next year from what I can tell which will help a lot. I think a big part of being an investor is always being willing to examine your assumptions. When I started out I wouldn't buy for less than 50k per door. Fast forward almost seven years later and I am now willing to pay more than that, but rents have gone up a lot in the meantime so that original framework is no longer valid. 

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  • Sean McKee
    OP
    Rental Property Investor · Chicago, IL · Member since 2017 · 268 posts · 189 votes
    4y

    @Jake Fugman, @Jonathan Klemm, @John Warren, @Michael K.- I completely agree. Your criteria and areas of interest had to adapt over the past few years or it would have been hard to find any deals. Little Village wasn't on my radar for years, but then an opportunity to purchase a 4 unit came up. South Shore and Hermosa have definitely peaked my interest as well. I do see a lot of people stretching with some of the multi-family. I've been out bid on some buildings that needed a lot of work and had me wondering what the buyer saw.  2022 will be an interesting year.

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  • Jonathan KlemmBusiness Member
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    Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes
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    @Sean McKee - Yea I think 2022 will continue to be a hot year for real estate.  With the rise of inflation happening it's only going to get harder and harder to get started in real estate.

    I am sure a lot of the buyers who are beating you out are seasoned investors who have the capital to deploy and understand the long-term appreciation that is happening in the areas you mentioned.

    Keep writing offers and you'll be sure to land something in the near future.

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  • Michael K.
    Investor · Chicago, IL · Member since 2018 · 352 posts · 176 votes
    4y

    @Sean McKee, sounds like you're taking the right approach. As far as being outbid I know that can be frustrating. @Jonathan Klemm is right, seasoned investors are buying as part of a portfolio, have a firm grasp on the associated financing/rehab/management costs, and as a result, are able to accept a lower rate of return than first time or independent investors. (by the way, do you have a target cap rate?)

    That said, you won't run into them on every deal. Keep looking for creative ways to add value or maximize rental income. You'll find something that works. 

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  • Eudith VacioPro Member
    Real Estate Agent · Chicago & NWI · Member since 2015 · 860 posts · 521 votes
    4y

    Hey @Sean McKee - great question!

    I definitely agree with everyone that has replied - I'm a huge advocate of the southwest side of Chicago including Brighton Park, Back of the Yards especially with new buildout on 47th and Western OR I'm a big fan of any areas near the border of Indiana like East Side/ South Chicago. 

    I love, love Northwest Indiana - I just bought a property in East Chicago a year and a half ago. Definitely keeping my eyes out for more deals but EC has appreciated significantly over the last year. 

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  • Sean McKee
    OP
    Rental Property Investor · Chicago, IL · Member since 2017 · 268 posts · 189 votes
    4y

    @Eudith Vacio- why do you like the border on near Indiana so much? This still Cook County right? I'm not very familiar with that area.

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  • Henry Lazerow
    Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes
    4y

    My favorite area right now is Albany Park plus it's a great place to live for those who want to House Hack. Rents are shooting up and for nice rehabs the tenants are 700+ credit scores. Lots of higher end bars popping up and new spec home builds. Prices for multi family still cashflow if you update the units and bring them up to market rate. Also Irving Park, West Edgewater, West Logan Square and on the southside Mckinley Park, Bridgeport and Brighton Park are all on the up. Huge increases in rent in Mckinley/Bridgeport today then even 3 years ago and it's still gentrifying fast. 

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  • Tom O.
    Chicago · Member since 2018 · 216 posts · 165 votes
    4y
    Originally posted by @Jake Fugman:

    @Sean McKee Like throughout most of the country, turn key single family rentals have been very hard to come by. Suburbs south of Chicago (Homewood, Hazel Crest, Matteson, etc) that had solid <$150k inventory 2-3 yrs ago now have very few properties that pencil out. Instead of trying for SFR in the $100-150k range Im finding it makes more sense to look at multifamily buildings on the far NW or SW side that are around the same price per door. If you can find properties in areas or condition(s) where you dont have to compete with FHA house hackers deals can still be found. Portage Park, N. Austin, Little Village, S. Woodlawn, Brainard all come to mind.

    I love Little Village and think it still has room to appreciate. You know, it's the next NH on the Pink Line from Pilsen. As another said here if you follow the subway lines out people seem to want to live walking distance from the El. 

    My friend has a Three Flat building that is about to come up on a listing that meets that criteria: walking distance from the last stop on the Brown line in Portage Park. Watch for it: 4533 N. Kimball. 


    https://www.realtor.com/reales...

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  • Tom O.
    Chicago · Member since 2018 · 216 posts · 165 votes
    4y
    Originally posted by @Henry Lazerow:

    My favorite area right now is Albany Park plus it's a great place to live for those who want to House Hack. Rents are shooting up and for nice rehabs the tenants are 700+ credit scores. Lots of higher end bars popping up and new spec home builds. Prices for multi family still cashflow if you update the units and bring them up to market rate. Also Irving Park, West Edgewater, West Logan Square and on the southside Mckinley Park, Bridgeport and Brighton Park are all on the up. Huge increases in rent in Mckinley/Bridgeport today then even 3 years ago and it's still gentrifying fast. 

    Couldn't agree more about Albany Park. Great place to house hack. Probably won't cash flow so great but nice for a househack. My buddy's three flat is going up on the MLS today or later this week. 4533 N. Kimball. I like Little Village onthe SW side as well.

     https://www.realtor.com/reales...

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