All Forum Posts by: Victor So

Hello everyone,

I am seeking help and advice on investing in my first rental property. Specifically, I am looking to invest in a single-family property around $250K, but I am unsure of which area to invest in for 2023.

I would greatly appreciate any insights or advice on areas that are currently good for investment, as well as any tips or suggestions for someone new to the rental property market.

Thank you in advance for your help!

I have a two unit brick building in logan square, Chicago that I’m house hacking. I have a soon to be empty 3bd/1ba first floor unit and an unfinished basement that I can either turn into a separate 2 bed one bath basement unit or I can annex it to the first floor unit and add three bedrooms in the basement.

I ran the numbers and I can make more money in both a long term rental and short term rental scenario renting the unit as a duplexed down unit and I would avoid a lot of excess work required to add the separate basement unit as a legal, conforming ADU.

What makes me nervous about duplexing down is having a less diversified income from this house hack.

If the short term rental has a few bad months or if the tenant in the unit stops paying, I have no other income to rely on in the building while im living in it. Thoughts?

Hello,

This is my first Post and question(s)! I would really like some help on. I have done extensive research on purchasing my first property, and I feel as if I need some guidance. I have been in the market since January this year for multifamily to invest into using FHA. I have the money saved up and analyzed hundreds of deals; however, whenever I find a *Good* deal I stand no chance in the market. For example I found a duplex In Kenosha built in 2003 with 6 beds and 4 baths split between the two bringin in 1700 in each and all the owner paid was sewage, and lawn. It was going for 365 and I offered 385 with an escalation clause to 400k, 30 day closing, as-is. sadly the seller got overwhelmed and needed an extra day and picked another offer... SHEESH! "On to the next". I made sure that every deal I do I have a good capitalization rate and ROI + scope out the location and connect some dots. Right now I am sitting on a property that with utils and tax included with FHA rate of 7% (trying to account for PMI ) with low rents 1600 each, CAP: 7.93% and ROI of %6.57. market rents in the area are 1850 so CAP: 8.9%, ROI: 34%. The problem I am having is a big thing I read about properties are Location, Location, Location. I want some clarity on this deal before pulling trigger. If someone were to have some experience with Chicago real-estate and have time to talk I would greatly appreciate it. This would be my first deal of my journey and I would really not want to shoot my self in the foot. I have plenty of more details, such as one unit has been fully renovated with in house washer and dryer, new construction in the neighborhood , but for some reason this property does not sit well with me. I have agents in all states around IL, sending me MLS and check Zillow on a 1day refresh three times a day. I feel like I cant find anything good, or I am overthinking it.

Hello, I'm John Scully, and I have most recently got a knack to pursue multi-family (2-3) condominiums/houses. I'm 18 years old, and currently hold 10k in equity, spread throughout cash and stocks. I aspire to be financially free, and hope to do so through real-estate and running my summer & spring asphalt sealcoating service. Any advice on any front from anyone would be monumental for my journey, and I'd be very grateful. I hope to network with people who are where I want to be, and grow relationships with others.

Hey All! 

Curious if anyone has insight or experience with buying a 2-Flat property in Chicago with a finished basement that is not technically a legal unit. My plan would be to live in the basement unit and rent out the other two legal units. I’m just worried on how likely it would be if the city were to find out and me be fined and then required to deconvert the basement to a non livable plan basement. 

Thanks for any input! 

@Arthur R. van der Vant @John Warren As both operators here in Chicago I know you guys are seeing all of these scam tenants that provide a 100% fake identify which has little red flags on the surface.  We must all have a screening process and always must follow that process.

https://www.biggerpockets.com/...

Hi Guys,

I've spoken with an investor friendly realtor here in my area about helping me find a house hack come July when my lease ends. I currently am paying 1200/month in rent. He says I should expect to still pay around 700/month HH'ing a 4BR house. If I used FHA on around a 350K home, Id be looking at 25-30k out of pocket, to save around 6k/year.

My question:

I'm not sure there is enough margin on 6k/year to justify a HH. Maintenance/repairs could easily erase that 6k and go beyond. If I could get closer to 0-300/month in mortgage payment, then perhaps a HH has more merit to it. Otherwise I'm of the mind to save 6-12 months longer and go into a BRRRR for my first deal.

Very curious to see what other more experienced minds think.  I appreciate the time to respond to my thoughts.

Hi BP friends,

What are your thoughts about buying a MFU house hack that initially has negative cash flow once it is occupied by tenants as long as I see possibly for cash flow in the future with refinancing for lower interest rate and completing updates that would lead to higher rent.

Background: I'm currently looking for my first house hack (and first investment) in the Chicago area with a FHA loan and 3.5% down payment. I've been searching in Jefferson Park, Albany Park, Irving Park, Portage Park, Avondale, Pilsen and University Village. Most of the properties I looked at are between my price range of $400k-$500k I believe I have found a few good duplexes that meet FHA guidelines, have strong bones and opportunity for sweat equity that will help me raise rent in the future. However, due to the high interest rates and low market rent costs these properties would either (best case scenario) break even or potentially have negative cash flow of $300-$500 dollars per month when they are fully occupied with year long tenants. When negotiating I plan to negotiate a buy down interest rate or price of home but realistically it will still not cash flow initially.

Strategy: I would hold this property and refinance in the future once I have 20%> equity and interest rates are lower. There's also opportunity for sweat equity to improve the out of date kitchen's, bathrooms and living room  but financially I won't be able to complete the updates all at once. With the updated units I would raise the rent. In the meantime I can try renting one unit as a medium term rental to help create cash flow or potentially live in it for longer if needed while the other unit has a year long tenant. Once both units are completely updated, with higher rent and interest rates are 4% or lower each unit could cash flow $300 per month. 

Is this a bad strategy for a small return? I understand that it's a risk because interest rates could potentially stay high for a long time and it wouldn't make sense to refi but this would be my first mortgage and investment property so I feel like I can take on the risk in this time when it's hard to find a good investment deal.

I would like  stay close to Chicago for now. I also want to buy now rather then wait another 6 months so I can start building equity and avoid competition. 

Thank you for any advice or input. 

Hey Everyone, I am moving to Chicago from the northeast with my girlfriend (plan for mid-late Spring time) and am going to be traveling out to view condos in the River North, Gold Coast, Old Town and Lincoln Park areas. I have been doing some extensive research around 2 bed, 2 bath condos in those neighborhoods and looking into the building's rental policies in case I ever would like to move back to the northeast. My question is surrounding why they appear to be so inexpensive in these larger buildings? Am I missing anything in terms of regulations or general market dynamics that would cause these prices to be lower than other, comparable metro areas?