Multi Family Investing in Chicago?

[Umair Rizwan]

I am looking to purchase a 3-4 unit property in Chicago. I am originally from NorCal and have been investing here but it's getting tougher to find cash flowing properties. I am currently in the process of locating RE agent and identifying areas that work. What part of Chicago would you all say is a good mix of price to rent ratios and can easily sustain the 1% rule. 

[Henry Lazerow]

I have sold several deals for California buyers. West Town is a good option. It won't be 1% but you can get around .8% for class A area 700+ credit renters and very strong demand. The areas with 1%+ will be lower rents and lower class renters who cause more ware/tear which makes cap/ex take up a higher percentage. The management fees change too for class A I have managers who do 5% flat but for lower class areas you are typically looking at 8%+. For 1% rule you can do Brighton Park, Mckinley Park (harder and harder now there), Belmont Craigin, Bronzeville hard to find and super hot right now but pop up once in a while and then there is of course chicago suburbs (higher taxes in suburbs but higher % ratio of cashflow so some trade offs). 

99% of deals aren't good. You buy the outliars. Most of my clients will raise rents significantly after purchase so knowing the market rents in an area is a strategy we use for an upper hand on finding cashflow potential. IL has no rent control here and many of these buildings have tenants who lived there many years and were not professionally marketed have seen rents go up 50%+ often on new lease up.