Chicago buy and hold or sell?

Question

Fellow BP investors in the Chicago area: I want to pick your mind.

I am closing on a 2 bedroom/1 bath condo in Grand Boulevard. I was able to get a decent deal at $70k while it looks like the comps in the area for 2bds condo's are selling around $110 - $130k. Rents in the area go from about $1,000 - $1,200.

I would like rent it out since I think the area has much more potential for appreciation but would also consider selling as I know this is a pretty good time to sell.

What would you do?

Thanks!

Eudith Vacio · Answer

Thanks @Erika Carter

Eudith Vacio · Answer

Thanks @John Warren

@Erika Carter do you think that area has more potential for appreciation? This condo is on 50th and Prairie. I'm not TOO familiar with the area but know it well enough to know that it was a great deal. It was an REO owned property...

@Lauren Speidel I will have to connect with you once I decide on making the move in the year or two.  I looked at your profile and you worked for Inland Bank - small world. My current lender just moved to Inland Bank this year!

Lauren Speidel · Answer

@John Warren Thank you for the mention! @Eudith Vacio If you're considering a 1031 Exchange there are definitely some rules and requirements that you'll want to familiarize yourself with. One of the biggest concerns for people completing 1031 Exchanges are the time frames as you have 45 calendar days to identify possible replacements and another 135 calendar days to close for a total of 180 calendar days.

Erika Carter · Answer

I like that area! Depends on your long term goals, but to me that would be a great rental!

John Warren · Answer

@Eudith Vacio I have represented four clients this year who have done 1031 exchanges. The challenge is, of course, to find the excellent replacement property so that you aren't exchanging all your equity for a negative cash flow deal.  It is possible to do though, and I think Chicago is a solid market to find deals still. I would personally look to do a 1031 exchange if I was in your shoes. You should reach out to @Lauren Speidel. She has helped several of my clients pull of 1031 exchanges.

Eudith Vacio · Answer

@David A Shiroma

Thanks. I would like to leverage this to tap into more properties. I just am not sure at which point I would like to do that. This year or next year. I'm leaning towards renting and then seeing where the market heads in the next year or two.

@Henry Lazerow Thank you. You think the market will get better in the next year or two? It's Grand Boulevard so I know there is more to come, just not sure where the general Chicago market will be going towards.

@Robert Zavala thanks. I agree! Go big or go home!

@Bob Floss II great question. I have my inspection this week and property management sucks. I've been trying to get a hold of them to obtain the financials but i'll be looking into that, thanks so much!

Bob Floss II · Answer

@Eudith Vacio Have you checked to make sure the association is healthy so the buyer on the flip can get fha financing?

Robert Zavala · Answer

I would sell and buy a multi-unit...go live in one and rent the others(now you make up for the lost potential revenue from the condo) and continue receiving income from other units. 4flats are great!!..and your close to keep an eye on your baby!..go big or don't go at all!..Good Luck!

Henry Lazerow · Answer

Do some updates and then sell Spring 2021 or Spring 2022. Get some more appreciation.