Berwyn or Humboldt Park - Single family house

Chicago, IL · Member since 2021 · 4 posts · 3 votes

Hi! I am trying to venture out and buy my first single detached house to rent, rehab and sell. I have experience with with condos in the city buy and renting out but do not have experience with single homes nor rehabbing. So I am excited to venture into this new project but I am aware that I will have to roll up my sleeves and I will have tons to learn. So far, I have two offers accepted by the owners AS-IS condition one in Berwyn and one in Humbold Park. Both homes are similar size, condition and price points (it matches the comps as well). Do any of you have any tips or suggestions on which would be a better investment?

Thanks!

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John Warren

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

@Ana Maria the big difference here is that Berwyn has a point of sale inspection and you should know what the violations are beforehand. For Chicago, you want to look up any violations on line but there isn't a point of sale inspection process like there is in the suburbs. A lot of investors that understand Chicago get hammered when they pivot to some of the collar counties like Berwyn because they assume the permit process will be the same (it won't). Make sure your team (realtor, attorney, contractor, etc) is advising you on all of these items.

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Crystal SmithPro Member
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Real Estate Broker · Chicago, IL · Member since 2014 · 2k+ posts · 1k+ votes
5y
Originally posted by @Ana Maria:
Hi! I am trying to venture out and buy my first single detached house to rent, rehab and sell. I have experience with with condos in the city buy and renting out but do not have experience with single homes nor rehabbing. So I am excited to venture into this new project but I am aware that I will have to roll up my sleeves and I will have tons to learn. So far, I have two offers accepted by the owners AS-IS condition one in Berwyn and one in Humbold Park. Both homes are similar size, condition and price points (it matches the comps as well). Do any of you have any tips or suggestions on which would be a better investment?

Thanks!

If you have comps then look at the days on market data for the recently sold comparables. If your purchase price, renovation costs, and ARV are the same then the best investment will be the one where the average and/or medium days on market or market time is less. In short- Go with the property where the data supports a quick resale.

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Paul De Luca
Real Estate Agent · Chicago, IL · Member since 2018 · 1k+ posts · 1k+ votes
5y
If the numbers are virtually identical, and without knowing the specifics, follow the numbers and then go with your gut. Make sure you're on top of the respective requirements for the City of Berwyn vs Chicago.
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Ana Maria
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Chicago, IL · Member since 2021 · 4 posts · 3 votes
5y

@Crystal Smith - Thanks for the help! By looking at numbers of days on market, it looks like Humboldt Park is a better option.

@Paul De Luca - going with my gut on Humboldt Park! Plus I live in the city so it is somewhat closer to me.
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Henry Lazerow
Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes
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Humboldt Park is awesome area congrats! Easy to sell them after rehab and prices shooting up.
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Jonathan KlemmBusiness Member
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Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes
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@Ana Maria - Maybe find a partner and take them both down! Since you are looking to flip them the long-term appreciation that Humboldt Park will provide doesn't really matter, so you should solely focus on the numbers and your return on investment (ROI). Are both properties in the same condition?

I think @Crystal Smith made a great suggestion - check days on the market so you know you can sell quickly when you are ready.
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John Warren
Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
5y
@Ana Maria the big difference here is that Berwyn has a point of sale inspection and you should know what the violations are beforehand. For Chicago, you want to look up any violations on line but there isn't a point of sale inspection process like there is in the suburbs. A lot of investors that understand Chicago get hammered when they pivot to some of the collar counties like Berwyn because they assume the permit process will be the same (it won't). Make sure your team (realtor, attorney, contractor, etc) is advising you on all of these items.
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Scott Lewis
Rental Property Investor · Irvine, CA · Member since 2021 · 12 posts · 11 votes
5y
@Ana Maria I am also looking to buy a property in Humboldt Park to buy and rehab, but I have a long-term hold strategy rather than flip. I'm curious if you considered holding long term before deciding to flip? As @Jonathan Klemm suggested, if you do consider some sort of partnership structure, I'm open to discussing. I've been searching for wholesalers who have these types of deals tied up...wondering how you found your deals.
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Ana Maria
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Chicago, IL · Member since 2021 · 4 posts · 3 votes
5y

@Jonathan Klemm Hi! Yes both are in similar conditions so I believe the rehab work will be similar efforts but also I am no expert. My attorney and I were also discussing of renting it out for the first year or so hoping that lumber prices go down and also gives me time to familiarize myself with the process and then jump on the rehab project. He also pointed out that there would be some tax benefits if we do it that way.

@John Warren Those are very good points! The agent of the Berwyn property mentioned the point of sale inspection and that was the first time I have ever heard of it. So definitely different process.

@Scott Lewis Yes it would be more medium/long term because west humboldt park is not 'HOT' yet-compared to east humboldt park. I see some nice houses going up but very few so rather keep it until it is a hotter market. Definitely open to connect and discuss future partnerships or just bounce ideas from each other since I am also new to this.

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