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Updated almost 2 years ago on . Most recent reply
#SOLD 3 UNIT AVONDALE $412K. How you find good deals in Chicago!
Just closed on a large 3 unit in Avondale for a client. The building was listed as a 2 unit and the broker said its forsure only a legal 2 no contingencies for 3. I had a strong feeling it's a 3 unit as I have brokered the same looking building nearby and know these buildings just have a grandfathered in non conforming but legal 3rd. My client put it under contract at $412k, took some risk and we just closed with it ending up as a 3 unit on the zoning doc! The market value is atleast $460k range for a 3 so a good $48k of equity on the buy, once rehabbed 3s can get $800s now in Avondale. The back up plan was to duplex up as a 2 or have an illegal unit which would of still also cashflowed. Rehabbed 2s still get low 600s.
There's deals out there. I have 3 others contingent now for clients and one contingent for myself. A big thing is you need run CURRENT rents right now. In some areas like Brighton Park, Little Village, etc. rents are getting 30% higher then year ago averages. On north side 20% higher then a year or so ago is doable with right finishes. I made this mistake myself a bit using the rent averages I knew from a year or so ago and it made me miss some deals.
AIRBNB is also a solid option if in right areas. I am co-hosting a clients airbnb in Avondale and pushing crazy numbers off a 2/1 unit. See below...
March - $2754 gross - $620 spent on cleanings = Net $2134 and this is still the low season
April - We did a monthly stay at $3110 gross - $120 cleaning = $2990 net still somewhat low season
May - Already have 13 days booked at $149 a night
June - Already have 6 days booked at $179 a night. Likely looking at around a $4000 net month.
For anyone interested in AIRBNB feel free to shoot me a PM happy to discuss how works and share some photos of the finishes we use to max out the rents. Basically anyone can get approved for 1 Airbnb in City of Chicago but its very difficult to get approved for more then 1 unit. I manage 12-15% gross so still cashflows higher after fees and if have time can do yourself too. Airbnb in the right areas is well worth the bit more work!
Most Popular Reply
Quote from @John Clark:
I don't know why any investor would want to accept an illegal apartment. One tenant complaint and the city discovers an illegal unit and the owner is screwed to the wall.
They're so common that if you decide not to accept them you're limiting the already constricted inventory out there. A lot of investors see the risk/reward calculation and they decide to go ahead with it. By the same token, one bad tenant can completely ruin an investment too. Or one large surprise expense. There is always potential risk looming somewhere.
- Paul De Luca
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