Best Chicago Suburbs to Invest in Multifamily properties

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Best Chicago Suburbs to Invest in Multifamily properties

Brant Biba
Member since 2018 · 10 posts · 3 votes

Hey Everyone,

I am relatively new to the Real Estate investment world. I am looking to purchase a multifamily unit to buy and hold within the next year and half. I am planning on living in it and renting out the other units. Does anyone have any recommendation for good areas to look into? 

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

@Mark Eichenlaub my client @Brant Biba hit a home run in Forest Park. Brant, you should post some photos of all the work you did duplexing down on here some time. 

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  • Randy Gillon
    Auburn, AL · Member since 2018 · 17 posts · 3 votes
    7y

    Welcome Brant. I think it’s laegely going to depend on how much you’re looking to spend. 

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  • Brant Biba
    OP
    Member since 2018 · 10 posts · 3 votes
    7y

    Randy,

    I am looking to spend 350k to 450k!

    1Reply
  • Mark AinleyBusiness Member
    Property Manager · Roselle, IL (Chicago Suburb) · Member since 2013 · 2k+ posts · 1k+ votes
    7y

    @Brant Biba I know this is general but Dupage County makes for a solid conservative long term buy and hold. There are opportunities other places too but very spotty.  Deals are getting harder to find so would advise looking at wider area vs honing in on a smaller town or two. 

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  • Brant Biba
    OP
    Member since 2018 · 10 posts · 3 votes
    7y

    @Mark Ainley thanks for the advice. I live in Darien and work in Addison currently so I would definitely prefer staying in Dupage County. 

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  • Mark AinleyBusiness Member
    Property Manager · Roselle, IL (Chicago Suburb) · Member since 2013 · 2k+ posts · 1k+ votes
    7y

    @Brant Biba grew up in Addison so know there is tons of opportunity there.  The area at Lake and Addison behind Jewel off of Michael Lane is actually an opportunity zone for what that is worth.  

    Dupage is tough to find great deals.   You have to almost find an Ok deal and find a way to make it great thru adding some value or running more efficiently. 

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  • Brant Biba
    OP
    Member since 2018 · 10 posts · 3 votes
    7y

    @Mark Ainley  I will have to check out that area more and be patient. I work right by that Jewel so that would be an opportune spot to invest you for all your insights! I work right by that Jewel so that would be an opportune spot to invest. 

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  • Jake FugmanBusiness Member
    Real Estate Broker · Chicago, IL · Member since 2016 · 256 posts · 250 votes
    7y

    @Brant Biba I agree with @Mark Ainley that its tough to find a great MF deal in a lot of the western suburbs simply since inventory is low.  You typically will need to look at older and more established areas that had the need to build a lot of 2-4 flat buildings in the last 100 yrs..  

    If you are looking to be outside of the city and as close to Darien as possible I would steer you towards Berwyn or perhaps Forest Park where there are a good amount of MF buildings and taxes are reasonable. 

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  • John Warren
    Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
    7y

    @Brant Biba I agree with @Mark Ainley. Deals are tougher to find these days, and you normally have to add value. I am pretty familiar with the near west suburbs in Cook county, and as @Jake Fugman mentioned you can occasionally get a good deal in places like Berwyn. These deals are getting slimmer though, and the deals that worked this year all had a value add component. Some of them allowed the new buyer to renovate and raise rents, one of them allowed the owner to air bnb a "mother in law" unit. 

    There really aren't any turn key deals that make sense these days. Once you start projecting what the tax liability will be after you purchase, you will realize that the turn key stuff will kill you once the taxes re-adjust in the future. 

    I would focus on a mildly distressed properties. See if you can find a short sale or an estate sale that needs a bit of elbow grease. These are very competitive when they arrive, so be ready to act when the right deal shows up. 

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  • Henry Lazerow
    Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes
    7y

    @Brant Biba For City of Chicago we are still finding cashflow in.....

    Avondale, East Humboldt Park, Western and Southern edges of Logan Square, Near West, Pilsen, Mckinley Park, Bridgeport, Bronzeville. These areas you can find ready to rent deals that positive cashflow with solid tenants/demand. 

    At $350-450k I would recommend checking out Mckinley Park or Bridgeport they both have a very suburban feel to them and are right off I55 so if work in suburbs not a bad drive. 

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  • Brant Biba
    OP
    Member since 2018 · 10 posts · 3 votes
    7y

    @John Warren

    @Mark Ainley

    @Jake Fugman

    @Henry Lazerow

    Thank you for all your insights. I am going to focus my efforts on budgeting for a multifamily where there is some rehab involved. Sounds like I need to keep an open mind about where I invest in the Chicago area, and make sure I do my homework with finding the right mortgage. 

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  • Michael Van
    Investor · Chicago, IL · Member since 2018 · 46 posts · 55 votes
    7y

    Ooooh its great to see other people in the Chicago area. Are there any meetups around the area that you recommend to learn? I would love to be able to tag along or meetup with any one of you guys that are actively working the Chicago area. 

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  • John Warren
    Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
    7y

    @Michael Van which area of the city are you looking to invest in? In Chicago we are blessed to have a lot of fabulous meetups, so depending on where you are in the city, we could recommend a few to you. I host one in Oak Park in the near western suburbs. 

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  • Michael Van
    Investor · Chicago, IL · Member since 2018 · 46 posts · 55 votes
    7y

    Thank you for your reply @John Warren. I'm pretty open to where I would like to invest in the city but I'm located in Bridgeport. Really the places on my mind are the Berwyn, Forest Park, Oak Park area, as well as places in the city that are close to public transportation. So my Chicago areas would probably be Bridgeport, McKinley Park, Chinatown, or Pilsen. I would really appreciate the recommendations as well as being able to attend your meetup as Oak Park is not that far from me. 

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  • Jake C.
    Rental Property Investor · Chicago, IL · Member since 2011 · 73 posts · 48 votes
    7y

    Love to see such activity in a Chicago thread!!

    @Brant Biba Have you ruled out South Side/West Side? I know it's got a bad rap, and it is certainly a high touch form of management, but if done properly, you can get above average returns. 

    For example, just looked at an 8 flat, mostly duplex 3/4 bed units in Park Manor that is fully rented but could use some TLC. Units are very desirable due to size/layout. Depending on how you go about it, likely an 11%-14% cap from day one.

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  • Ben Stewart
    Rental Property Investor · Chicago, IL · Member since 2017 · 14 posts · 4 votes
    7y

    This is a great thread! Are there Chicago neighborhoods for under $200k B-C locations that are recommended?

    I'm looking for 2-4 units in that price range that need minimal rehab.

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  • Brant Biba
    OP
    Member since 2018 · 10 posts · 3 votes
    7y

    @Jake C.

    I am looking to be closer to where I work in Addison and would like to live in one of the units so I do think the South side will work well for me as of now. But maybe a few years down the road once I get the ball rolling I could start investing down there!

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  • Brearin Land
    New to Real Estate · Chicago, IL · Member since 2017 · 1 post · 0 votes
    7y

    I am currently looking for the same. The closest place outside of sketchy places south and west of the city would be areas up north. Rogers park and little India are areas I am looking at.

    0Reply
  • Mark Eichenlaub
    Investor · Chicago suburbs · Member since 2018 · 31 posts · 4 votes
    5y

    Great thread!   how did you all make out in the Chicago suburbs?

    0Reply
  • John Warren
    Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
    5y

    @Mark Eichenlaub my client @Brant Biba hit a home run in Forest Park. Brant, you should post some photos of all the work you did duplexing down on here some time. 

    3Reply
  • Mark Eichenlaub
    Investor · Chicago suburbs · Member since 2018 · 31 posts · 4 votes
    5y

    @John Warren thank you! @Brant Biba I’d love to hear more

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  • Brant Biba
    OP
    Member since 2018 · 10 posts · 3 votes
    5y

    @Mark Eichenlaub and @John Warren Yes for sure! Once all of the holiday festivities are complete I will make sure to do a formal write up!

    0Reply
  • Aaron ZimmermanBusiness Member
    Accountant · Chicago, IL · Member since 2018 · 2k+ posts · 1k+ votes
    5y

    I have a couple friends that invest in Berwyn. It's a good market from what they've told me. 

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