House hacking and finance strategy idea

[Luis Garcia]

Hello,

My daughter is relocating to Chicago middle of next year.  She hasn't settled on where to live yet.  She may live in an apartment first before deciding.   I'm suggesting she consider a small multi family.  She will be a first time home buyer.  My wife and I recently started investing in Tucson.  

I'd appreciate suggestions on areas to look for small multi family properties.  Hoping to find a deal on a 2-3 unit that needs a little TLC.  

Also, could we finance a small multifamily where my daughter purchases one unit and I purchase the other?  This way she can take advantage of any first time homebuyer program.   Are there considerations with doing it this way if we sell?

We'll go visit a couple times between February-April and move date in May(?).  Hoping I can attend any investor events while there.  Any insights to help us get connected would be appreciated.

[Brie Schmidt]

@Luis Garcia  Chicago is a big city, there are 240k homes in Tucson and 1.2 million in Chicago.  Like others haven mentioned things like budget, access to transit, commute times will all be variables.  Did you have a price point in mind?

The entire 2-4 unit is on one lot so it has 1 tax PIN.  That means it is sold as one asset and needs 1 loan.  Various loan programs have different requirements where you might not be able to invest with her if you are not living there yourself.  Talk to a lender first, but a way to get around "gifting" her money which has limits is to add her to your bank account.  If she has two bank statements with her name on it then that money is considered hers and you can fund the down payment and work out the details between you two.

I own my own brokerage firm and have a team of investor agents.  95% of our business is 2-4 units in the Chicagoland area.  If it were me, I would focus on renting when you come out here.  Our winter market is pretty dead and doesn't even start picking up till April.  Usually we aren't in full swing till after Memorial Day.  Trying to purchase and close on a property by May would be too tight of a timeline.  I don't think that is enough time to get to know areas, decide where you want to live, and find a good property and close.  Understand that less than 10% of properties cash flow in the first place.  I would focus on finding an apartment to rent and then utilize this summer to get to know neighborhoods and casually look for properties.  Chicago has a law that the landlord cannot deny the tenant the ability to sublet. So let's say she finds something she loves in fall, she can still purchase it she just needs to find a replacement tenant for her unit, which shouldn't be hard to do.