Advice for Multifamily Rental in NW Chicago Suburb

[Nick Garzini]

Hello BP community! I am looking for a multifamily rental property in the NW suburbs of Chicago (Oak Park, Forest Park, etc). I live in CA, but my wife grew up in the area and we have family and friends that still live close to the area. My strategy is to use my HELOC to fund the down payment (I have over $400k in equity in my personal residence) so I am essentially putting none of my own money into the deal. I am accounting for the interest only HELOC payments when I analyze a deal.

Here are my main concerns/questions:

1) Most deals I can find are projected to cash flow less than $100 (assuming 30 year fixed, 5% vacancy, 10% maintenance, 5% capital expenditures, 10% management fees, HELOC interest). Is it worth doing a deal that is almost cash flow neutral? I get nervous being that close to a negative cash flow.

2) It appears there has not been much in the way of appreciation in this area.  One property I am looking at sold for $226k in 2002, $115k in 2011, and is now listed for $225k.  I know appreciation is not something that should be relied on, but if i am going to buy a deal with almost $0 cash flow I want to at least have the possibility of recognizing appreciation.  

Thank you in advance for any input you can share!