All Forum Posts by: Tom Casey

Hey Matt!

I live and specialize in downtown Chicago and surrounding areas, including some neighborhoods that you mentioned like Lincoln Park, Wicker Park, and Lakeview. Happy to hear that you're looking to buy here! Chicago is one of the most overlooked markets in the country. Our A-class neighborhoods have renter demand that is off the charts and so much room for appreciation it's nuts! If you're breaking even after all expenses in a Chicago A-class neighborhood, that is a homerun deal. Your property will appreciate, you will have close to 0% vacancy, and rents will almost surely continue to rise YoY.

Option 1: Multi-families below $400K are few and far between in Chicago's B/C-class, especially if you're looking for something mostly move-in ready/turn-key. Would you consider going up to around $650K if the numbers penciled out? The money you have saved would cover down payment and closing costs up to that amount (on a 3.5% down FHA) and I think you could definitely find something good if you expanded your budget! Operating STR and MTR would be a bit easier owning your own building because it would be less likely to get "caught".

Option 2: I may be biased because I'm downtown, but I absolutely love the A-class Chicago neighborhood condo market. You can find a very nice one-bed for under $300K (might sound like a lot but it's not compared to other big cities). As I mentioned above, appreciation, close-to-zero vacancy, and strong rent growth will be your best friends here. The STR market here is a bit complicated due to HOA regulations that almost never allow them, so I always recommend to make sure that the unit pencils out to at least break even as a standard rental in case the HOA makes a fuss.

I would love to talk more with you about all the considerations and neighborhood dynamics that make Chicago the complex and beautiful real estate market that it is. Feel free to reach out any time to discuss more!

Hey Aishah!

First of all, congrats on deciding to make the move and start investing in real estate! I love that you're targeting Chicago's A/B-class neighborhoods. I live downtown in Lakeshore East and specialize in all areas close to city center. A-class neighborhoods here have so much upside potential in terms of appreciation, plus the renter demand is off the charts! In the best neighborhoods, you will see close to 0% vacancy, rents increasing YoY, huge pool of high quality tenants, and consistently appreciating property values.

A couple questions/insights here:

1. Are you planning on doing a live-in/househack or strictly investment property? If you're planning on househacking, you can go with an FHA 3.5% down loan or a conventional 5-10% down. Either way, $200K will be more than enough for down payment, closing costs, any cosmetic rehab, and a good buffer on a turn-key 3-4 unit building in some of Chicago's best neighborhoods. If you're just investing and not going to be living there, your down payment will have to be higher. We have relationships with lenders who should be able to get you 15% down instead of the standard 20-25% for investment properties. But if you're looking for strictly investment and to stay in A-class neighborhoods, I would target 2-3 unit buildings that require some cosmetic updates. All-in-all, you will have plenty more options if you're able to leverage a smaller down payment loan by using the building as your primary residence!

2. I understand that you're looking to cashflow right away, but would you okay with breaking even for a few years? This is an important point to address in Chicago's best neighborhoods. You'll have very strong buyer and renter demand, but you're not likely to find properties that cashflow if you're buying them with a loan. However, there's a multitude of reasons why you would want to buy in Chicago's A/B class neighborhoods as opposed to C/D class. I know I mentioned some above, but just to reiterate: close to 0% vacancy, less maintenance/turn-over costs, strong appreciating markets, more short-term rental demand and higher rates. Basically, you're paying a premium to avoid many issues present and future. 

Hope that helps and would love to hear from you!

Hey Ryan!

Sounds like a doozy, sorry you're going through that with the tenant. And sounds like she's going through some stuff too. I commend your patience with her, sometimes that's the hardest part!

I agree with @Michael K. and @Henry Lazerow above. Even though she has not been very reasonable with you, I would not try to withhold any of her security deposit if I were you. Here's why: It's my understanding that under Illinois tenant-landlord laws that as a landlord with a MTM tenant, it's your responsibility (not the tenant's) to give a 30-day notice to vacate. It sounds to me like she told you she'd be moving out in a week, but you never had a chance to send her that 30-day notice. Illinois is a state that highly favors tenants over landlords and if she really wanted to make it a legal battle, there's a chance that it wouldn't end well for you since she never got a 30-day notice to vacate. To me, this is a risk/reward type of situation. It sounds like she'll be out soon and you can get a good tenant in there ASAP (I really hope this is the case for you). I just don't think the couple hundred extra bucks will be worth your while, especially because she sounds like someone who could potentially become resentful and press charges. 

Hey Jess!

I live downtown and specialize in Chicago neighborhoods that are active and fun close to city center. I would recommend starting your search in Old Town, Gold Coast, Lincoln Park, Lakeview, Uptown, Streeterville, Lakeshore East, South Loop, West Loop, River North, River West, Wicker Park, Bucktown, Ukrainian Village, West Town. I'm sure I'm leaving out a couple, but these are the hottest neighborhoods in Chicago and you will have a ton of options as far as social life. You may need to expand your budget a tad, but if lifestyle is what you're looking for, these are the neighborhoods that you'll want to target.

Hope that helps!

Isn't it funny how there are no clear paths in college for a career in real estate even though it is arguably the #1 best tool for creating generational wealth? Makes you think! 🤨

Of course Luke! Sounds like you have reasonable expectations, which is always a great thing lol. I look forward to keeping in touch!

@Paul De Luca is spot on. You'll want to make sure that you're hiring an actual property manager and not just a real estate agent. They are two very different jobs! Most important thing here, in my opinion, is going to be making sure you have very clear terms laid out prior to entering into a management agreement. I would go with someone who's been doing property management for a while and has experience. Personally, when clients ask if I do management, I tell them I do not and refer them to property managers in the BP network. I have heard nothing but great feedback about Mark Ainley as well. He should be able to steer you in the right direction on this.

Best of luck! 

Hey Luke!

So the good news is that there are currently two full-amenity condo buildings in/near downtown Chicago in prime A+ Class neighborhoods that allow short-term rentals: 545 N Dearborn and 30 E Huron. However, both associations have a 30-day minimum for all lease agreements.

Unfortunately, the bad news is that there really aren't any other buildings that I know of where the association allows short-term leases. I have done quite a bit of digging and I've been told by multiple agents that these are the only two that don't have rules against STR.

If you're serious about going this route, I believe that these two buildings would be a good place to start.

Also, if you're not completely set on the buildings being full amenity, I agree with @Michael K. that you can find some multi-unit gems in great neighborhoods and operate them as STR buildings. Just be wary that technically, according to Chicago's Airbnb ordinance, you can only operate 25% of the units in your building as Airbnbs. I heard this on Straight Up Chicago podcast episode 143 about rules for STRs in Chicago. Here's a link to that episode if you're interested: https://www.straightupchicagoi... 

I think that overall, multi-unit buildings will be your best bet if you don't want to risk getting in trouble with condo associations. 

However, if you don't mind taking on that risk, you can also run numbers for condo units so that they still work as regular rentals. Then if the association cracks down, you'll have a backup plan where you still at least break even on PITIA.

Hope that helps!

Hey Rebecca!

Congrats on working to get your license here in Illinois! I've been an agent in Chicago now for about a year and a half and I love working in the city. My one piece of advice would be that if you are looking to be an investor-friendly agent, try to join a team/brokerage that is working a lot with investors. For my first year of licensure, I worked on a team that was not really working with investors (my team leads actually said they don't like working with them lol). I didn't think that was a good fit for me because I love working with investors. So a few months ago, I made the switch to The Axon Group (eXp Realty) and I have been loving it so far! They provide a lot of investor leads as well as resources and training consistently. They work with mostly investors, so I feel like it has been a great fit for me. 

Anyway, best of luck getting your license and let me know if you have any specific questions. Please keep in touch!

Hey Teresa, I have an excellent carpenter! I'll shoot you a DM with his phone number. Just tell him I sent you his way.