All Forum Posts by: John Hu

 yeah thats the program every time i put in my information it rejected me... now its closed so the city is just having fun with the racket... i'm paying 400 bucks a month for water and sewer even though another building that has a meter is 75 a month for similar occupancy and usage

 how'd you get your water meter installed for a 2 flat? everywhere i tried it was only single family,  Did you go through a service or something?

Albany park southeast corner where brown line ends sure.   But if you go north and west there’s not a whole lot there. 

And your point about looking a whole lot like Schaumburg.  That’s what I mean. It’s filling out in a less dense manner cuz there’s so much space.   It’s not Lincoln park, wicker park or Logan square density.  I’m just saying there a correlation between density and property values.  

this right here is the gem advice.  This was Ukrainian village, wicker, Humboldt park (this one I never understood since it’s not near a train), west loop, university village, little village, and Pilsen.  

Gentrification starts with racism.  Call it nicely it’s market inefficiency but recognize that Chicago historically is a very segregated city.  It was only within the last 30 years has the upper middle class incomes start to spread out of the lake.  

Gentrification follows the formula of cheap rent+ east commute to downtown + open vacant space for restaurants and bars + proximity to another gentrified neighborhood that is getting to expensive so people expand their search to surrounding.   Thats the wicker, buck town, logan , and now Avondale expansion.  

There are some area I don’t think will ever gentrify even in the north side.   Like Albany park.  It just lacks the opportunity for commute and restaurant scene.  Chicago has no east west train line that it really needs, It’s already too expensive for anyone to invest, but not expensive enough to really build out.  It’s just going to slowing increase with inflation.  The closer to get to i94 the more valuable it’ll be, but it won’t go crazy like Logan or Avondale.  

The south side is great opportunity, but growing up in the south side I can tell you That anything south of 31st is gonna be for a long hauler.  The reality is there’s too much space to fill up as part of the gentrification. The density isn’t there and won’t get there for a long while.  Chicago need another million people in population to force us to push south.   You can see Bridgeport is just building in old industrial space. Pilsen is filling in and replacing buildings north of cermak.  But there’s still quite a bit of open availability that needs to fill in before expansion occurs.  

follow the train lines has been my tactic.  Jefferson park around the blue line, up and down milwaukee has all the precursors to becoming a gentrified location.  It’s easy access to the other neighborhoods   Lots of potential development space for bars and restaurants   Lake effect brewing is dumping money into a brew pub.  Lots of upscale single family homes are coming up so people with money are moving into the area.  It’s only time before commerce and gentrification follows…

There are lots of 2/3 flats in the area with reasonable pricing etc…

whatever you do.. stay away from Jefferson Park... especially areas south of the blue line... I don't need to compete against other investors in my stomping grounds... lol

while there is some truth to the supply issue... I think the 2-4 units down fall because while the interest is higher, its still affordable with an FHA loan for owner occupied and there are enough people looking to house hack still that it'll prop up the market. Fannie has effectively killed the non-owner occupied multiunit loan so that means investor's aren't looking for 2-4 as hard (unless they're willing to get portfolio financing). As an investor looking to make decisions purely on numbers, I can tell you I'm out bid by FHA owner occupied offers by as much as 80k... my last one was I went in at list with 25% down conventional and a 3% FHA owner occupied outbid me close to 60k. that right there means us investors just don't impact pricing.

I do think the top end of the 2-4 where you don't see has many house hackers are going to come down with the lack of funding availability... meaning buildings that spec'd on investors abilities to purchase... buildings that can't pass FHA, or the price is higher than the max loan limit with a 3% down etc... those guys are going to come down... if you can get private funding... I would look into the higher price buildings that command decent rent or buildings that can't pass an FHA inspection and just plan on spending $ to renovate afterwards

if you're in the Chicago area... they ALL suck (sorta) the reality is there's a bunch of small shops that end up oversubscribing their capabilities quite a bit and never follow up...the property manager you want is an owner operator that has a property near yours and you can tack on to their existing network of providers etc... I'd look around the other buildings near yours and look for the managed by signs and start calling... most of them are just LLC's setup for like 1 or 2 buildings... see if any of them would be interested in picking yours

everything other people have said; I got slight 1 step further and segment the market by potential customers.  I see being a landlord as a business and your tenants are your customers.  when you break it up like that then you can start looking at demographics... e.g.

I'll give you an example - I have a 3 unit in Jefferson Park.  its a little far from the blue line so I basically broken down the potential personas to the following 

1) Single Parents looking for good neighborhood school (Beaubien / Taft are considered better in the CPS neighborhood school rankings)

2) lower income young room mates looking to split rent

3) late 20 early 30s work from home and wanting to get away from the hustle and bustle of the hipper neighborhoods and save some money

4) people who have lived in the area for a while and like the area

for each one I look up the demographic for the area / city and then target income level and assume for any given year there's probably 5% of the overall demographic that would be looking to move. Assuming that number is high enough, I would then look reverse the perspective and ask if I was one of these personas, would I want to live in this property?  

 so another year has gone by and nothing done by the city... I'm really surprise no group of property owners got annoyed and put together a class action.