Feedback in Chicago!

[Matthew Bernal]

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Chicago.

Purchase price: $570,000
Cash invested: $100,000

A project that I am currently in the process of rehabbing in Chicago's beautiful Park District. I had originally intended for the finished product to be a 3 bed/2 bath duplex up/duplex down, but have been told that it is more profitable to convert to a single family home. Will need a property manager soon! Would love to connect with other investors in Chicago for feedback!

Purchase Price: $570,000
Rehab: $355,000
ARV: $1,300,000

NOI: $157,523
DCR: 1.56
IRR: 1.38%

What made you interested in investing in this type of deal?

I obtained this property towards the beginning of my investing journey. An associate of mine happened to live in the area, and stated that Chicago had lots of great opportunities. I purchased three properties within three months of that conversation. Summerdale was one of them.

How did you find this deal and how did you negotiate it?

I found this deal with the help of two outstanding realtor partners in the Chicago area.
This project didn't require much negotiation. I had specific numbers that I wouldn't budge on, and the seller had been trying, unsuccessfully, to sell for 7 months. In the end, we both walked away happy.

How did you finance this deal?

I financed this deal by using a hard money loan to cover 85% of the purchase price and 100% of the construction costs. The associate I mentioned above brought a capital partner in to cover the remaining 15%.

How did you add value to the deal?

I added value to this deal by networking with great people and by being creative with different exit strategies.

What was the outcome?

Unfortunately, this property had some hurdles. The good news is that I was able to buy the project out and get it back on track.

Lessons learned? Challenges?

This property taught me that at the end of the day, I am ultimately responsible for the success or failure of any project I am involved in. Every deal requires consistent follow up, dedication to synchronicity, and a commitment to accountability.