All Forum Posts by: Jake Fugman

@Sean McKee Like throughout most of the country, turn key single family rentals have been very hard to come by. Suburbs south of Chicago (Homewood, Hazel Crest, Matteson, etc) that had solid <$150k inventory 2-3 yrs ago now have very few properties that pencil out. Instead of trying for SFR in the $100-150k range Im finding it makes more sense to look at multifamily buildings on the far NW or SW side that are around the same price per door. If you can find properties in areas or condition(s) where you dont have to compete with FHA house hackers deals can still be found. Portage Park, N. Austin, Little Village, S. Woodlawn, Brainard all come to mind.

@Scott Swanson  Try @Mark Ainley and his company GC Realty.  They know EVERYONE in Chicago and have a presence in Rogers Park. Ive sent many clients their way with confidence. 

@Kevin Klaas  Hey Kevin!  Congrats on your plans to build the portfolio.  The Chicago market is super diverse and has a lot to offer all shapes/sizes of investors.  If you need assistance analyzing any multifamily 2-4 unit deals or 5+ deals under $2M let me know - that is where I have the most experience and would be happy to help. 

@Alexander Szikla  I echo what @John Warren said - often the advertised CAP rate assumes expenses that are unrealistic. Ex: =<5% management fee or flat $100/mo maintenance/repairs for a 5+ unit building. Actuals would be closer to 8% and 5% of gross rent respectively. Dont forget about leasing fees too since they are hardly ever accounted for in proforma.

There are true 8%+ CAP rate properties on the south, west, and SW side of the city, but you will find more often those #s are very hard to hit in the suburbs due to higher tax rates (compared to Chicago). Typically the higher the unit count, the better chance you have to get a better CAP rate.

If you find a property that looks interesting make sure to connect with someone (PM or broker) that has local experience to vet the #s

Good luck!

@Lucas Hammer "Cloud Property Management LLC" handles a few 2-4 unit buildings in Marshall Square area for my clients.

@Mallikarjun Reddy Pateel 

1. If you list at market prices it should be easy to attract tenants.  5-10% total vacancy expense is appropriate in most Chicago markets (about 1 mo every 18-24 months). 

2.TheCHA.org has a lot of good info related to Section 8 vouchers.  Lawndale will be an area where section 8 is typical

3. 8-9% CAP is typical for some neighborhoods on the south, west and SW side. Just make sure the figures you are looking at use accurate expenses (and projected rent in this case). EX: A lot of limiting offering memos will show a 5% management expense when its easily a 8-10% expense in Chicago.

@Zack Karp is your man. 

Good luck @Pat Dansdill   Glad to have worked with you in IL!!

Great insight @Henry Lazerow. Definitely easier to pass the FHA "self sufficiency test" when looking at 4 units. Any 3 units over $475,000 are VERY challenging these days if you are only putting 3.5-5% down. Typically we have the most success with legal 2 units (often with non-conforming basements or attics) under $500k that dont have to pass the SST. OR jump up to legal 4 units.

The SW side is becoming a solid alternative to those that dont demand to be on the NW side. Im a fan of areas west of Pilsen like Heart of Chicago and portions of Marshall Square to find 2-4 units that can still allow house hackers to put under 10% down. 

@Zak Marinko  eXp Realty is a good shop for those looking to hang license if you are an investor.  Low fees, great splits, but still full service and amazing tech.  Its a cloud based model so not a lot of pressure to pay high monthly desk fees if you only do a few deals to year.  You have to be a self-starter though since there isn't a true physical office to head into on a daily basis - most all of the training and support is online. 

Lastly, they offer 2-3 "free" personal deals per year as well so you can keep all the commission on any of your own purchases or sales w/out paying into the company split.