BRRRRing Chicago and its suburbs

[Ian Dikhtiar]

Greetings, folks

On my path towards my first purchase that I hope to make one day in a near future, I wanted to ask experienced investors in Chicago area an suburbs a couple of questions and I would love to hear your opinion and maybe share your experience with a complete rookie in a business.

1. What do you folks think about the current Chicago market (the city itself) for BRRRR strategy?

I've been running numbers, even on the properties I can not afford in any near future (unless I find a partner), and I haven't seen too many good houses that can be BRRRR'ed. The math just doesn't add up that well. I've been as pessimistic about my ARV and rehab estimate costs as I could be and it just doesn't add up unless you drop the safety margin (then everything becomes great and super cash-flowing, LOL). Now, I'm not talking about high-crime areas. I understand that there are a TON of possibilities, especially with Section 8 program, but I do not really want to start with it. I might be misunderstanding something and missing out on great deals. Would love to hear stories of successful brrrr in a city in anyone has one.

2. What about suburbs and further areas (like North Chicago, Aurora, Elgin, etc.)

Any luck there? It also looks like a great market, especially with a limited budget. But it is still very hard to me to get even an approximate ARV on those areas simply because of the lack of experience and that's why my calculator breaks my hopes every time with loses instead of a profit.

3. (Not really BRRRR-related, but I would love your opinions on it) Am I looking at the wrong place?

Should I be going all-in knocking on peoples doors with my offers without knowing what I'm really doing? Or should I play safe and stick to my real estate agent (who's awesome, by the way, would highly recommend him to anyone interested) and just go full MLS trying to catch up with a people who have the instant cash right away to grab all the good deals?

I've been extremely passionate about investing, so I can break out of the endless job cycle and start making difference and helping other players in this wonderful game and I would ABSOLUTELY appreciate any opinion and advice from the community. I know that really successful investors don't share their secrets with strangers, especially in a local market, however, there's still a chance, isn't it?

Also, you must pardon my messed up English, not my first language)

Thank yall!

[Chris Kelch]

Hey Ian, 

I'm not as familiar with neighborhoods in the city so don't take my word but I've heard here and there that you'd want to start by analyzing properties just on the fringe of the newly developed areas to the west and northwest. Like you mentioned, there are many suburbs that have properties where the numbers may work. 

I would not knock on peoples doors without knowing what you're doing or try and catch up to the cash buyers. I would recommend taking your time to make sure your real estate education is in a solid spot, continue to get involved at meet ups and forums, pick an area, and continue to build both a team and lead generating sources in that specific area: relationships that you build, continue with your agent, wholesalers, maybe start to explore auctions if you're a cash buyer (be careful though), conduct your own searches online, etc. Like they say a lot on the BP podcast these days, you've got to extend the outside of the funnel to be HUGE to make a few offers to get one deal. 

I understand your fear on analysis paralysis taking a permanent grip but being patient is better than rushing into a bad deal.