Chicago A neighborhood condo as first property

[John B.]

Hello,

I am 35, live in Chicago and work in the Loop for a demanding finance company. I never owned any real estate and have been renting a high rise one bedroom for $1,800 in River North with my girlfriend for the past couple years, and we love it here.

I have done well in my career and am currently sitting on a mid 7 figure liquid portfolio all invested in equity index funds, and I think diversifying a bit in real estate might be a good strategy. Thanks to my high W2 income and not having any debt, it would also be easy to get approved for some cheap 2.x% financing.

Having never owned real estate, a good way to get started would be by owning my primary residence for a while, with the intent of eventually renting it out in a few years and in the meantime seeing how I feel about maintenance and home ownership in general.

Unfortunately, the areas I am looking at are in very high demand (River North, West Loop, Fulton Market), and have prices such that I would at best barely break even with rent after taking into account HOA and taxes ($300k-500k range for 1-2 bd, HOA in the ~$500/mo).

I understand condos in downtown are generally a bad investment, but I really don’t want my quality of life to suffer by moving far just for the sake of home ownership. I take great happiness in keeping my commute to a 20 minute walk door-to-door all year round (even winter!).

Do you think I have some hope of this being a reasonable strategy, or should I just keep renting?

At this time I really do not have time for buying and renting out properties, I would basically need someone to handhold me completely through the process, and I tend to be overly cautious of scams.

Thanks!

[Henry Lazerow]

I work with a lot of people in a similar position and also invest heavily in index funds which is how I financed my 4 unit rehab that I house hack. In terms of a condo, you can definitely find one that works from a cashflow standpoint in those areas but it may be a townhouse or a low-rise style building though. I recomend going for a 3 unit property and then rent out two of the units while living in one. You can do a nice rehab to your unit so it has your desired standard of living. The nice thing about the more expensive areas is when you do a rehab you can create a large chunk of equity/get really high rents for the rehabbed units. 

P.S. Old Town/south end of Lincoln Park can be a good option as well as West Town neighborhood. Still close to downtown and more supply of multi units.