Househacking in Chicago

[Allen Bosbyshell]

Housinghacking in Chicago with an FHA loan for $250K... Is it possible? Yes, it's possible! But how?? I am looking to buy my first property as a two or three flat in Chicago, IL. I am using an FHA loan and with a max purchase price of $250K. What areas should I look at? Where can I find these deals?

So far I am approved with multiple lenders. I have an agent, though he is not he best match for an investor. I have toured multiple properties on the South and West sides that are FHA passable. Nothing that I can imagine great tenants would want to move into.

Chase bank has a program that offers $10K DPA for the 10 neighborhoods in the City's "InvestSouthWest" initiative. The City also has a $15K incentive areas in certain blocks in certain neighborhoods. (The neighborhood that has really caught my eye so far is New City "Back of the Yards"). I will also be using IDHA's fogivable $6K loan.

My question is really, where should I look? How should I conduct my search? What are the potential trade offs between more bedrooms versus nicer area, etc. I would love to set up a phone conversation if possible.

Thank you.

[Zack Karp]

@Allen Bosbyshell if you make less than $71,280/yr, and you actually have a 5% down payment you can put down, you might want to rethink your strategy.  You may have been preapproved by a few lenders, but if none of them are trying to get you to use Home Possible on your first property, then you are talking to the wrong LO's.

Regarding the IHDA down payment assistance, did any of them explain to you that if you refinance your property in the first 10 years, you have to pay a prorated amount of that back? And if you are planning to house hack, in order to refinance a FHA loan into a Conventional loan, the max LTV is 75%. Which means if you put 3.5% down, you have to create 21.5% more equity before you can move on to property #2. Why? Because you can only have 1 FHA loan at a time (unless you relocate 100 miles away). So in order to buy another property with FHA, you have to refinance out of FHA on the first one.

If your LO's are not walking through all of your options and strategies with the lens of a real estate investor, explaining the pros and cons, and looking 2,3,4 moves ahead with you, again you are talking to the wrong people.  Sadly, most LO's and especially bank LO's are just glorified order takers just looking for a commission.  You might be setting yourself up to get stuck.

For all I know, you have already explored all of this, and this is your only option.  Just beware that the exit strategy is more important than the entrance.  Always.

And if you need a rockstar realtor that specializes with investors in Chicago, hit me up on DM and I can connect you.

Best of luck!