All Forum Posts by: Jake Fugman

@Scott Steele Awesome to hear! There is a great community of investors, agents, and the like in Chicago market and BP is BY FAR the best way to connect with them. Id recommend looking for REI meetups close to where you live or plan to invest. Feel free to reach out if you need advice on some areas to target based on your goals.

@Frank Serrano depends on budget and strategy (cash flow or appreciation). Its tough to find anything in good condition that hits the 1% rule so you will need to look for a fixer if you want to be w/in 45 min commute downtown.  Around $125-150k/unit I like Lincoln Square. Under $125K/unit West Rogers Park has some good value.   Anything under $125k on the northside will be in pretty distressed condition from my experience. 

@JR Dadivas  Welcome!! Step #1 should definitely be confirming your budget/financing based on your investment goals and current cash/income situation.  If that means getting an intro through an investor friendly agent then of course you can speak with agent first.  Having even a slightly more narrowed budget and strategy will enable an agent to better advise you early on VS having too many vague conversations on how best to get started.  

Some advice for anyone looking to leverage FHA is to remember that the "Self Sufficiency Test" (for 3+ units) will typically mean that a property must loosely already meet the "1% rule" or the numbers simply wont work for the underwriter. Make sure you inquire with you lender for more details so you dont waste too much time looking buildings that may meet your cash flow criteria but wont qualify for a loan. Often this de-rails any properties in B class or higher neighborhoods due to prices simply being too high. You are already on the right track look in the fringe west, NW, and SW areas where you can still find buildings around the $100-125k/unit mark (depending on condition).

@Ian Rowland Confirming your financing strategy should always be your first step. A lot of investors try to focus on a specific property type, CAP rate, or price first but then are surprised to find financing wont work out for a variety of reasons. I always recommend you nail down your budget based on cash on hand, acceptable ROI, rehab, and loan type FIRST then work backwards with a good agent to setup a search. Good luck!

@Katie Babbitt  If you are only using the license for yourself I would go with a firm that only charges you transaction fees.  I chose the firm where Im at because I do a mix of personal deals and retail.  eXp offers 2 free personal deals per year which is great for investors, but they do still charge a low monthly fee.  

@Edward Pang  Welcome to the investor pool! House hacking is a great way to leverage low cash down, but like you have discovered the buildings in B+ areas like Bridgeport are pricey and make cash flowing tough.  IF you are willing to live a bit outside of Bridgeport but still on SW side in decent mobility areas - I would recommend considering Cicero or Berwyn for a house hack where the #s can work well. 

Section 8 is potentially great for cash flow from day 1 but you will need to put 20-25% down on pure investment properties with most loan packages.  If that's not an issue I would say that the most important part of building wealth with section 8 isn't necessarily finding the deals, but more so finding a great property manager.  Feel free to PM for a connection.

Good luck!

@Einat Menashe  If you are willing/able to do medium to large rehabs to the unit(s) it will be possible to hit the 1% rule but there wont be anything turn key in area that have seen 5-10% appreciation in recent years (near west and NW sides).  The west side and near south sides of the city are the areas to look for the 10%+ cap rates but you wont find that they have good potential for appreciation. 

@Einat Menashe Welcome!  It really depends on if you are looking to buy/hold or try and flip.  There are still some C class (more often D class neighborhoods) in Chicago where you can find the "1% rule" applies, but typically they are a good distance from city center and you may have to deal with similar class tenants. Anything C+ and above you will find that its very hard to hit the 1% rule unless you do a decent size rehab. 

If you are open to SFH in the suburbs Id recommend looking about 25 miles SW or South where you can secure homes for around $100,000 that will rent for $1300-1400/mo. Just watch out for the taxes which are typically higher VS Chicago.

@Jake Faris I was in a similar situation as part time investor and I chose eXp Realty.  They are in all 50 states, low fees, and they allow a few "free" personal deals per year where you dont have to give a cut of commission to the sponsoring brokerage.

@Katy Schlake   Welcome to the area!  House hacking is a great way to get started, but slightly more challenging if you need to start in the suburbs VS the city of Chicago.  Its a simple matter of supply for 2-4 units in western burbs being very low - especially in the A&B class towns which leads to high prices. 

So, if you are willing/able I would definitely recommend figuring out how close to the city you are willing to get in order to find a market with decent inventory of multifamily. 

If you must be in a market like Naperville I think you may get a better bang for your buck finding a semi distressed SFH that could act as a live in flip. Then refi after your rehab and get the BRRRR strategy rolling..

Good luck!