All Forum Posts by: Trevor Fritz

Hi Carli,

I know this was previously brought up but househacking a 2-3 unit is definitely the best route. I searched for quite a lot of time in my early 20's for the right place but was looking in the wrong areas. I wanted to live in Lincoln Park, Old Town, Bucktown, (insert other popular areas) and there was nothing that really worked with cash flow, expenses to fix up the units, and down payments. I do not regret it because I was able to get my hands on two cash-flowing condos. 
Another option depending on your situation is buying a condo in a popular place and having roommates cover your mortgage and other expenses. 

I sort of landed on this second option and I also decided to move a little further outside of the areas where I previously wanted to live that were well below my means. The extra money that I saved I have heavily invested in index funds and that has proved to be a great way to build wealth. Lmk if you have questions!

With low rates put down 5%. Finding condos that cash flow well is meh in my opinion especially is you hit a special assessment. $250,000 will only get you a one bed or a 2 bed on a busy street or garden. Clearing $100-200 a month won’t be enough so be critical of what you find. Don’t mean to sound pessimistic, you can definitely find something that works. Looking forward to seeing what you find to buy and the numbers associated to it. 

Just some food for thought, I recently bought a place with low/moderate cash flow (when I decide to rent it) but it allows me to keep my living expenses with my girlfriend moving in under $750 a month each which has allowed me to save so much more than any investment. I wish I would have done it at 24-25 when I had roommates. The money I saved I’ve invested in stocks and luckily stocks have worked in my favor... for now. 

Welcome and best of luck! For under $400k you may find it difficult to find a place that is not going to need a significant amount of work. Areas near where I live that you could begin searching is Irving Park, Avondale, Humboldt Park, etc. I looked for about 2 years and came up empty on finding a place that I felt was a great (not just good) investment. I ended up buying a 2 bed condo that needed some work and was well below budget and I am using it as $$ saver opportunity. 

Hi Scott. I love the enthusiasm. I was in a similar situation but a couple years behind in terms of thinking about real estate. I went to IU and I am from the Chicago suburbs. I would recommend living at home for a year and learning as much as you can and building a team with a real estate investment/multi-unit real estate agent (not all agents are equally...not even close) and a mortgage broker who is creative when it comes to these projects (pm me and I can give his contact info). After living at home for a year, hopefully you have saved enough for an FHA 3.5% down payment and that you have found a place in a neighborhood you would enjoy living in. I would recommend southwest Logan Square, Albany/Irving Park, or maybe Avondale for the price range you will likely be looking at. If I could go back, I would have found a spot I could have had some of my friends live with me in my unit and then rent out the other unit(s). Ideally, you will be living there for free while stockpiling cash for reserves and CapEx and be on your way. I looked at probably 50+ 2-4 units and I became extremely discouraged by how overpriced many were and if not overpriced, the fear that many of these multiunits needed $50k+ to be fixed up (think decks, stair cases, foundation, cosmetics).

Your other option in order to save money would be finding a 3 bed condo in another area that you may enjoy living in more and having 2 friends move in who would cover all of your costs and again, the investment is that you are living for free and saving all of that money. In reality, that may be the best way to get you off the ground and with a nice nest egg. Based off where I wanted to live post-college, this is probably what I should have done in hindsight.

Congrats! Did you know the tenants before hand or are you just finding people who need a bedroom to stay in? I wish I would have made this move in my early 20s. 

@Jeff Burdick congrats on closing on a new place! Would you mind sharing the details? Price, taxes, expected rent, Capex, etc? I have ran numbers on dozens of places and could not justify the capital vs the return.

I agree on condos completely. My first place was 50k that is now worth $110,000 and I rent it for $1100 a month so I got a steal with that one...until that special assessment comes...but it has produced a 150% ROI over 4 years so far. Agreed that this is not the norm or anywhere near what my recent purchase will be.

Hi @Reed Meyer, it is awesome that you are getting into real estate investing right out of college. I started investing at 25 in a condo in the NW suburbs that I got pretty lucky on and recently bought a condo in Irving Park that will allow me to live below my means and then rent it out at a decent investment. 

I know there are people on here who are more knowledgable than me but I will give you some insight into what frustrated me the most. My dad is in construction and pretty much any 2 flats/2flat+in law unit/3 flats were either in tear down shape, needed 100k to fix them up, or had been fixed up with new appliances but the bones were abysmal and not worth my risk appetite. 

My opinion on what you should do: Buy a 3 bedroom condo in an area that you and your friends wouldn't mind living in. Off the beaten path in Logan Square or off the Brown line in Irving Park. You will still need probably more than $20k. I wish I would have done this but didn't consider it until my friends and I were in positions to not be living with 2-3 roommates. Hypothetically, you could put yourself in a great position after 3-4 years if you get to live rent-free and save an extra $15k a year. I have found, sometimes the best investment is finding an opportunity to bring in some cash flow while also living as cheap as possible. 

I have worked with a great investment broker who came up with some unique financing options for my investments so let me know if you would like his contact info. I can share his IG account which demonstrates his understanding of financing and investing. 

Hi everyone, I am looking for a CPA that can provide me better guidance on my real estate holdings and overall investment strategy. Thanks for your help in advance and Happy New Year! 

Very impressive! What neighborhood is this in? This ratio of the purchase price to rent is well beyond anything I have come across unless the HOA fees are in the $600+ range. Mostly what I have found is $220,000 w/ ~$200 HOA rents for 1600 to ~$300,000 rents for $2000.

Hi everyone,

I am currently working with a new lender who seems to have some awesome ideas and creative solutions. I am under contract for a condo for $215,000 and am looking to live in it for 3-5 years and then renting it out. He is giving me options but is recommending that I put down only 5% and paying the PMI up front. This would save me about $30k that I would now have freed up for investing in other projects or holding onto when I would like to purchase my next property. Does anyone have experience with this and whether this would be ideal for me? My monthly payments will be higher but my monthly payments will be well below what I can currently afford even with a larger loan.

Thanks in advance!