Flip in Chicago

[Matthew Bernal]

Investment Info:

Small multi-family (2-4 units) fix & flip investment in Chicago.

Purchase price: $675,000
Cash invested: $120,000
Sale price: $1,090,000

I purchased a two-unit property in the Lakeview neighborhood of Chicago, IL, for $675,000. The property was originally built in 1970 and renovated in 2021 by a renowned architect, George Pappageorge, who re-designed it as a master’s thesis project. I decided to convert it into a single family home by combining the two units and adding some finishing touches. I spent $130,000 on the conversion and rehab, which included updating the kitchen and bathrooms, installing new flooring and lighting, painting the walls and ceilings, and landscaping the backyard. I listed the property for sale and received multiple offers. I accepted the highest offer of $1,090,000, which was well above the market value. After paying 8% of the sale price in closing costs and commissions, I made a profit of $197,800 on this deal. It was a rewarding experience to transform an old two-flat into a modern and spacious single family home.

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

There was lots of opportunity to convert multifamily homes into single-family homes in the Chicago area. I noticed the trend and decided to capitalize.

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

I found the deal by using specific search prompts on Zillow and Redfin. The negotiations were pretty simple, as the sellers had failed to get a buyer in 9 months during the hottest market in history.

How did you finance this deal?

Hard money and private money lenders were key in financing this project.

How did you add value to the deal?

I developed my own underwriting process, leveraged my skills in negotiation, and put together a solid team.

What was the outcome?

The deal wound up being quite profitable. Everyone was happy in the end!

Lessons learned? Challenges?

I learned the hurdles that come with doing projects out of state and how to overcome them. With the right team, anything is possible.