All Forum Posts by: Michele Richard

Hey @Michele Richard!  Welcome to the Chicago BiggerPockets Community!

It's always great to have new investors coming into the market.

Your question is pretty broad - I think it's always been to start with Why, How, & Where

Why are you getting into real estate & what's your end goal?  Why will likely determine how because if you are looking for cashflow vs. appreciation vs. quick capital

How could it be househacking, brrrr, flip, long term -> You mentioned BRRRR, which is an awesome strategy but will only work in specific sectors of Chicagoland. finding the perfect brrrr in the current environment is extremely tough!

Where is determined by how!  Because Chicago is amazing in the sense that it has prices at all levels and tons of old inventory in need of renovation (if you want to renovate).

Networking in person was the biggest help for me to get started.  Here is some events posted on BP:  https://www.biggerpockets.com/forums/521-real-estate-events-...

@Michele Richard I would start in your own backyard first. Which area do you live in? Which areas make you feel comfortable? Normally you need to find a bread and butter B class neighborhood to make money in real estate. Look for the Star Bucks and Jimmy Johns to find the right type of neighborhood. 

You also will want to find an area that is very transactional. This is the part a lot of newer investors miss, but if you find a good neighborhood where very few properties trade then there won't be a market for you to find (or even know how to evaluate) a "good" deal. 

Go wherever you can find deals.  But the closer to where you live is always better so you can self manage and save money.  Also much easier to manage contractors to rehab.

The key is finding discounts. If you're paying retail here, the property taxes make it really tough to cash flow. You need to be all in (purchase plus rehab) at 70% ARV or better - maybe 75%.

The other thing I would look at is appreciation and cash flow.  You typically get one better than the other.  So do you want more appreciation, then you won't have as much cash flow. Or vice versa.

The lesser areas can typically cash flow better and have more opportunities for bigger discounts.  But they're more difficult to manage because of a lesser renter pool and the appreciation tends not to be as great. 

To me, I always stayed away from those areas even if the discounts and cash flow were greater.  But I stayed out of the super expensive areas too.  I liked the smaller towns with nicer schools. Rented great. Had to work to find the discounts - but now those are much much harder to come by. And the numbers that I had hoped for when I started ended up being every bit as good if not way better to be honest.

I'd say do one or two and then see if you like it. If you do, set a goal for how many you want to do every year and you'll force yourself to find a way to hit that goal.  In 10 years, you'll be kicking yourself for not buying double the number of homes you bought.  

Hi Michele, I'm a Realtor & PM in the Chicago and Northwest Indiana markets. I would suggest looking into smaller towns on the outskirts of Chicago, these areas can be great for SFH investments. Also, research the landlord and tenant laws/ordinances.