All Forum Posts by: Marcin Talaga

You can find 3 unit buildings for around $350k in a decent Chicago neighborhood. Problem is that the only way to make a decent ROI would be to self manage it. If you plan to live out of state and hire a property manager to run it then you'll eat up a lot of that profit. You'd have to be willing to spend around $700k for bigger buildings or take your $350k budget to harsher neighborhoods and hope for quality tenants.

Taxes are high and going up, water and sewer costs are going up every year but so are rents. In my investment area, Northern Illinois and particularly Chicago and Northwest suburbs, over the last 6 years rents have gone up by 20% while taxes and other fees have gone up by about 10%.  What does that mean for the long run?  Hard to tell.  But the value of the properties in my area have also gone up by about 20% over the last 5 years so I see more benefits then negatives overall.  

@Dan P. I keep hearing people say "run from Chicago and Illinois" and I don't quite get it. I've been investing in Chicago for the last 6 years and have been very happy with it. Depending on your price range and ROI requirements, Chicago or the surrounding areas and towns may work for you. There is a lot of "noise" regarding investing in Chicago but when you learn to drown it out and focus on finding quality properties at quality prices, it can be a very good market.

I agree with @John Warren, a lot of negativity regarding Illinois, and Chicago in particular.  I have been investing in Chicago and plan on doing so for the long haul.  Every area has it's particular pluses/minuses and challenges but if you find the right deal at the right price, it'll work out.  I feel it also depends on what kind of investing you want to do.  SF rentals I think are really tough in Illinois.  2flats/3flats/6 unit buildings I think are great long term investments but hard to find right now.  Flipping houses is still going strong but also inventory is real low.  My biggest problem with Chicago and the surrounding areas isn't whether to invest or not.  It's that inventory is so low that it's real hard to find good deals and when one does come out, you have tons of competition fighting over it.  

Tammy, 1st learn the market.  Hook up with a Realtor that knows the area well and won't mind putting in the time with you as you look for that right deal.  2nd, figure out your financing/finances.  Will you buy and renovate with cash?  Or reno loan?  Combination of both?  Maybe hard money loan?  A big chunk of profit goes towards interest and overhead.  Figure out where the money will be coming from and have your financing set.  3rd, find a contractor that is affordable and trustworthy.  Make sure they too will be patient with you as right now to find a good flip you'll have to look at a lot of properties.  If you have any questions, feel free to ask. 

Welcome Angela, good luck in your endeavors!

In Chicago you shouldn't have a problem building a garage.  If you need a good garage company let me know.  I think you'll be able to get it built for under $10k, depending on size of course.

David, depending on the hard money rate and your construction costs it is possible, but I've noticed it's become harder to make a decent profit.  The homes in Chicago are too expensive to for the most part to use hard money.  I started buying with a conventional loan and using my own cash to do the renovations.  At that point I'm able to make a decent amount and still have that cushion incase something goes wrong.  In order to have a safe cushion plus make money while using hard money, you either need to find a real steal.  Or be ok with making less money then the competition.  

Finding good homes to flip or apartment buildings to purchase has become almost impossible using the MLS here in Chicago. Almost all the best deals are handled off market. I've started a postcard/door hanger/letter advertising campaign to try and find off market deals but was wondering if anyone has had any success with these and how many have you had to send out before getting results? I don't know if I should be spending a few hundred dollars a month on this advertising, a few thousand, or even more than that. I guess I'm looking to hear how successful or unsuccessful people have been in their focused areas.

Kevin, if you are the type of person who is willing to live with tenants and deal with tenant issues I would highly recommend trying to purchase a 2 flat or 3 flat.  Sounds like you are saving money pretty quickly and if you have to wait until the summer to save up a bigger down payment then do it.  There is nothing better than having your first Real Estate purchase have a rental return.  It'll set you up well for the future. I'm a Realtor in Chicago and would love to help you if you'd like.  PM me and we can meet up for coffee.