Househack in Chicago

[Garfield M.]

Investment Info:

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

Purchase price: $565,000

3 Flat McKinley Park. Gut rehabbed 2011, minimal rehab in 1 unit - $5k to add new vinyl flooring, new bath vanity, quartz countertops, paint entire unit, professionally painted cabinets. Saved money by doing the work myself. All units with in unit laundry, stainless appliances. Monthly cash flow is based on after move out. Financed 10% down conventional, no PMI. Brought about 66k to closing (seller credit). Bought prior to hitting MLS by calling selling agent.

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

Strong rental market, good location. Stable rental community. I already live and manage in the neighborhood so its been easy to manage.

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

I found this property by walking my neighborhood and I saw a "coming soon" sign on the property. I reached out to the seller agent and my agent prior to the property hitting the MLS. I made a strong offer after seeing the potential. First floor unit needed some work but nothing major, easy cosmetic fixes that made the rehab cheap and easy. I offered the seller free rent in his unit for one month to close on his new house.

How did you finance this deal?

10% down conventional no PMI

How did you add value to the deal?

Seeing the needs of the seller and making an attractive offer that worked for both sides.

What was the outcome?

Top floor rented for $1700 with one weekend of showings.

Bottom floor rented for $1600 in the same weekend. These rents are higher than I was expecting so monthly income is higher than planned.

All rehab work was completed and vacant unit was rented within 30 days of purchase.

Lessons learned? Challenges?

Get professional pictures for your rental postings, especially if you have nicer finishes. Although Purchase price was high, I anticipate this property to be easy to manage due to the recent gut in 2011. The numbers worked for me since the cash flow is there even at a high Purchase price.