Need some advice and opinions on the Chicago Multifamily Deal

[Nnabuenyi Anigbogu]

Hello everyone,

I wanted to get a little opinion on a deal that i could be closing on next month. It is a owner occupied multifamily but i will be moving out after a year and converting it to a full investment property (buying another one).

I have tried to be VERY conservative on the analysis (expenses are 50% of rent). The current renters are all friends of the previous owners so they are all paying 200-500 below market rents (i used what they are currently paying for the analysis though). I used a 10% vacancy rate although the area i am in (albany Park chicago) has about a 4% vacancy rates based on research. I used a 10% reserve fund which really eats into cash flow (and a 1K misc fund on top). I dont think i need to have all of that but i decided to take that approach.

Everything else is overestimated except for insurance (actual) and Taxes (actual). From what i can see with the extremely conservative approach i will still have positive cash flow when i move out.

There is plenty of upside if i get the rents to market price (which i plan to do over then next year or two). I can actually have cash flow while living in the 1/1 or 2/1 with market rents. Also i did not include potential parking income (5 spaces and parking is tight in the area so i can charge $50 a month).

Thank you for your input

Nnabuenyi