All Forum Posts by: Demetrius Davis

Thanks @Jake Fugman! Great advice! I was considering residential multifamily because as part of my exit strategy, I can sell to FHA buyers as well as investors. However, given the interest rate difference, 5-6 units could make a lot of sense.

@Paul De Luca mainly MLS. Looking to stack 3 and 4-unit buildings for the next 2 years before moving into larger multifamily. I'm using bank financing at 75% LTV. Leveraging equity from other properties or securities-based loans to fund 25% down payment.

Looking for South Side 3 and 4 unit buildings on blocks with long-standing families. Light value add (cosmetic only). 9%+ cap rate. <$1M asking prices.

Patrick, great point! The numbers are the numbers! Deals can essentially work at any interest rate if the purchase price, expenses, and rents support it.

I've noticed a lot of price drops over the past week on SFH in Chicago. Hoping MF will follow suit after Labor Day.

@Jaron Walling thanks for your post! I think that’s a very prudent approach! I’m in a similar camp, trying to stay disciplined with the numbers. I’m also finding it difficult to gauge the potential rent when analyzing deals. In our market (Chicago), there are landlords listing units several hundred above the market rents likely to see if someone will bite due to inflation and demand. It’s not as easy as it used to be to estimate rent for a given area.

I'm pivoting from Chicago SFH investing to multifamily (South Side), but I wish I had arrived to the party 6 months earlier. With investor mortgage rates above 6% plus points, prices on the South Side barely meeting the 1% rule, property tax increases, and the prospect of even higher rates if a cash-out refi is done on a value-add MF 6 months from now, how are you playing the Chicago multi-family market currently? Are you continuing to pursue deals? Are you waiting for a fall/winter price cool down? Are you waiting for bigger dips?

I invest in Bronzeville.

@Calvin

@Calvin Lipscomb, I am not currently investing in Chicago, simply because I have been unable to find deals that make sense.  If I can find a deal with decent margin, I would purchase another flip or rental in Chicago.

@Paul Bommarito thanks for your post and insights into Avondale. 

@Jarrell D. makes a good point about the south suburbs, but taxes worry me there. 

Jarrell, which towns are you seeing as most stable with regarding to taxes, yet still able to cash flow?

Kingston north of 80th street is a high crime, high poverty area.  Lots of very nice, large apt building.  However large apartment buildings attract large families.  When you place lots of large families living in poverty together in dense spaces, you tend to get lots of issues.  

Once you get south of 80th street, there are more single family homes, and therefore lower density.  That area is decent for investment.  You can make money on Kingston north of 80th St., but your tenant pool quality will be likely much lower.

Thanks everyone for all the great feedback and insights! A lot of people agree that the Chicago market is one that is tough for squeezing out deals these days. Question for Chicago investors: What’s your investment strategy now?  Have you moved on to other markets?  If so, which ones?  Are you sitting on your cash?