Chicago House Hacking

[Kyle Wilkins]

Hey fellow Chicago BPers,

I am looking to get started in real estate investing and am getting swayed more and more towards house hacking. I am a younger guy living in Chicago and with the price of real estate in Chicago I am finding it hard to wrap my mind around how I would buy a duplex/triplex and qualify for a mortgage with limited funds while staying in at least a decent area.

Has anyone successfully house hacked here? I’m curious if there is something that I am missing or not properly thinking about. If I could find a duplex/triplex in a decent area that I could qualify for I would begin to jump on it quickly. Any advice is greatly appreciated!

[John Clark]

First things first: How much are your "limited funds" and of those funds, how much do you want to commit to down payment and closing costs.

Second: Define "decent area." Chicago does not stop at the South Loop. If you're looking only at the North Side, you are missing out. Southwest side can be good.

Third: Check your bank. What amounts of mortgage, and what kinds of mortgage do you qualify for? There are FHA mortgages, and 243(k) (?) loans (that include funds for repairs), with low down payments.

My suggestion is to get your financial house in order -- know your resources, talk to your lenders as to funding limits and programs they handle, time to process, etc. Know your financial limits, and THEN go to a real estate agent or other source for leads on what's on the market and find places that match your criteria, including your immediate and middle-term lifestyle aspirations. Nobody can give you meaningful advice when your details are limited to "house hack," "limited funds," and "decent area."

Good luck.