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Updated over 4 years ago on . Most recent reply
Chicago Househack Analysis
Hi all -been analyzing Multifamily Househacks in Chicago and am getting some crazy numbers. Would like to verify on BP and seek critique for any assumptions I'm making.
| PROPERTY INFO | |
| Property Address | 3319 North Drake Avenue, Chicago, Illinois 60618 |
| MLS# | |
| Property Listing Price | $ 380,000.00 |
| Number of Units (Duplex, Triplex, 4plex) | 2 |
| Square Footage | 3,125 |
| Rehab Needed? (None/Light/Medium/Heavy/Full) | None |
| Bedrooms/Bathrooms | 6/3 |
| Crime Level (Low/Medium/High) | Low |
| Your Offer Price | $ 365,000.00 |
| Rehab Price/Square Foot (Refer to Key on Right) | $ - |
| Total Rehab Estimate | $ - |
| Total Cost (Purchase + Rehab) | $ 365,000.00 |
| MINIMUM Down Payment Required for Purchase | $ 18,250.00 |
| Conventional Loan Amount (Total - Down payment) | $ 346,750.00 |
| ... | |
| FULL OCCUPANCY CASH FLOW | |
| Est. Monthly Rent (using Rentometer) | $ 5,094.00 |
| 1% Rule (Rent should be 1% of Purchase + Rehab) | $ 3,650.00 |
| Does this PASS the 1% Rule? | YES |
| Est. Monthly Payment (PITI + PMI) - Mortg. Calculator | $ 2,482.11 |
| Est. Monthly OpEx (PITI + PMI + Utilities + Reserves) | $ 3,979.97 |
| Est. Monthly Cash flow (Rent - OpEx) | $ 1,114.03 |
| CoCRoI | 73.3% |
...
| HOUSEHACKING CASH FLOW | |
| Est. Monthly Rents | $ 4,183.00 |
| 1% Rule | $ 3,650.00 |
| Does this PASS the 1% Rule? | YES |
| Est. Monthly Payment | $ 2,482.11 |
| Est. Monthly OpEx | $ 3,979.97 |
| Est. Monthly Cash flow | $ 283.03 |
| CoCRoI | 18.6% |
...
| Utilities (Varies by Property) | ||
| Electricity | ||
| Water & Sewer | 300.00 | |
| Garbage | 150.00 | |
| Shoveling/Lawn Care | 80 | |
| Total | $ 530.00 | |
| ... |
||
| Reserves | ||
| Vacancy (%) | 5.00% | $ 254.70 |
| Repairs & Maintenance (%) | 7.00% | $ 356.58 |
| CapEx (%) | 7.00% | $ 356.58 |
| Management Fees (%) | $ - | |
| Total | $ 967.86 |
ASSUMPTIONS
-5% Down Owner-Occupied Mortgage
-3.5% Interest Rate
-.75% PMI Rate
-$6100 in property tax (from Realtor.com Tax History section)
-$2400 in yearly home insurance
RENTS
-$1822 for a 2br, 1.5 bath (Rentometer - Average Rent)
-$3272 for a 4br,, 1.5 bath (Rentometer - Average Rent)
Chicago Realtors, Chicago Real Estate Investors, Chicago Househackers, Chicago Landlords, Chicago Lenders - looking for your thoughts on my deal analysis here.
What erroneous assumptions am I making?
What parts of my analysis should be tweaked?
What words of advice do you have for someone looking to househack in Chicago for 2021?
Thanks for your time,
AJ
Most Popular Reply
- Real Estate Broker
- 3412 S. Harlem Avenue Riverside, IL 60546
- 5,059
- Votes |
- 6,017
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@AJ Smith good for you trying to dive in! I took a quick look, and your rent number is high. Avondale is a great rental neighborhood, but I don't think you can get quite that much on a monthly basis. Maybe you could get $3500-4000 depending on how much work you do to the place. I would think for the 4 bed duplexed unit you could get around $2000 and maybe a bit more if it was really nice. For the 2 bed/1.5 bath you could get into the $1400-1600 range pretty easily.
On the expenses side, your numbers are actually a bit too conservative. We typically run 5% vacancy in Chicago, but the real vacancy you will experience in this neighborhood will more likely be 2-3%. The maintenance and CapEx numbers also are a bit high as I normally run 5% for maintenance and 5% for CapEx. Percentages can be deceiving if you are running numbers in multiple markets as 7% of a $600 rental is actually less than 5% of a $1500 rental!