House Hack - 2 Flat in Uptown Chicago near Andersonville

[Taylor Doyle]

Investment Info:

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

Purchase price: $520,000
Cash invested: $340,000

This is a House Hack investment property in Uptown Chicago near Andersonville. My wife and I live on the 2nd floor and rent out the first floor. We have been repairing various aspects of the building since 2019. We gut renovated the entire 1st floor, the 2nd floor kitchen and bath and turned the basement into a Garden Unit. It's been a long journey (fired our first GC, GC'd it ourselves, then hired another GC) and we've learned a lot from the experience.

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

We wanted to have passive income from rental properties. We also were looking for a condo, but found them all to be very expensive. This building was in the location we wanted and we were excited about the idea of being able to remodel it while making income from the rental.

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

Searched on Redfin and our Realtors listings. There were several interested buyers. We offered $5k over any other buyer's asking price up to $520k (with proof of verified offer).

How did you finance this deal?

15% down and 30 year Mortgage

How did you add value to the deal?

Nearly gut renovated the entire thing over 5 years

What was the outcome?

We still live here as of 2024! We love the space. It cost way more than we budgeted for. We found out a year ago that we were having a baby and we were able to make a new opening in the first floor so that we could expand into it and use both floors for ourselves. We are preparing to rent out the newly renovated garden unit.

Lessons learned? Challenges?

Vet your contractors better and don't let positive past performance excuse current poor performance. Our first contractor in retrospect was not great. They were fast and cheap, but the quality wasn't always there and they were a mess. It got worse over time, since the contractor lost a few key team members and we should've let him go then.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Elizabeth Amidon, Lorenzo with Archetype Construction