New real estate looking for advice if possible.

[Kendall Moore]

Hi, everyone, I am new to the forums, I  have been reading a lot of other post about questions that I have. I wanted to make my own post. I have seen some consultants on post as well would love to connect to someone if willing to provide me with advice. I live in the Houston, Tx but I am originally from Chicago,IL. I am mostly interested in the Chicagoland area. I have searched the Houston area and not as much luck(I may be looking in the wrong area).

My goal is to hopefully start with multi-family no more than 3 units per property. Plan is to buy one property a year for the next 5 years. I want to hold these units for sometime and collect rental income. 

I am looking to buy a place and rehab.  Problems I am seeing in Houston, a lot of new construction and the numbers are not working due to the cost of the new units. Chicago has some homes I have come across low prices but may need a lot of rehab.

I am also looking into what pitfalls to be aware of when trying to do a rehab project on homes in major needs of upgrades in Chicago. Zoning laws permits ects. 

I am open to the price point of 50k-150k purchase plus about another 50K-100K for rehab. 

Would also like to rent out to section 8 tenant if possible. I have checked into starting the process but it seems as if you need to have the property to apply.  

[Frank Avallone II]

Hi @Kendall Moore, glad to hear you are interested in getting started in real estate investing. 

Not sure of your current living situation but have you considered getting started with a livin in multi family purchase using an FHA mortgage to put as little as 3.5% down on a multi family up to 4 units?

When looking be patient most of the times a great deal won't be there waiting immediately but you will find one if you keep looking.

Buying and renovating is a great way to create equity to then use to fuel your next investments.  

[Kendall Moore]

Quote from @Frank Avallone II:

Hi @Kendall Moore, glad to hear you are interested in getting started in real estate investing. 

Not sure of your current living situation but have you considered getting started with a livin in multi family purchase using an FHA mortgage to put as little as 3.5% down on a multi family up to 4 units?

When looking be patient most of the times a great deal won't be there waiting immediately but you will find one if you keep looking.

Buying and renovating is a great way to create equity to then use to fuel your next investments.  

 Hi, I currently live in a townhouse. I've been here for about a year now. 

[Eliott Elias]

Houston is a great market, so much demand and so much diversity, there is almost any type of asset class you can imagine. Happy to connect you with wholesalers out there 

[Nathan Gesner]

Quote from @Kendall Moore:

You can find more multi-family in Chicago for under $200,000 but there's a reason. Chicago doesn't appreciate as well as Houston and is a lot more difficult for Landlords. Those properties under $200,000 in Chicago look pretty rough. And how are you going to renovate and manage them while living in Texas?

I would consider looking at markets that are affordable without the tenant-friendly regulations.

[Paul De Luca]

@Kendall Moore

Like @Nathan Gesner said you can find 2-4 unit properties in Chicagoland for less than $200k but you're mostly going to be limited to either the south side of Chicago or the south suburbs of Chicago close to the Indiana border. I talked to an OOS investor the other day about exactly this criteria. Some of the areas aren't terrible though and are considered C class.

If you need recommendations on where to look, let me know.

[Travis Timmons]

Welcome to the party! My specialty is in short and medium term rentals, so my advice on multifamily is worth what you paid for it. I'm also originally from IL and now live in Houston. I'm familiar with both markets. If I had 200k and wanted multifamily I'd look in a secondary TX market like Waco, Bryan/College Station, Killeen, Abilene, Lubbock, San Marcos, maybe Corpus Christi. The price point is lower and there is a rising tide of home values in TX. As the major cities get more expensive, I see these medium sized cities continuing to grow in population and value. In the last 6 months, we've seen 3 friends (families with young kids) move to Waco or College Station on account of the lower cost of housing/living. That's a very anecdotal example but probably represents a growing trend. 

I have nothing to sell and am happy to help. Send me a message if you think that I could be a resource.

[Mitchell Roadruck]

Hey @Kendall Moore, I wouldn't rule out Northwest Indiana. Indiana is way more landlord friendly. Folks and businesses are moving to IN in droves.

[Crystal Smith]

Quote from @Kendall Moore:

Hi, everyone, I am new to the forums, I  have been reading a lot of other post about questions that I have. I wanted to make my own post. I have seen some consultants on post as well would love to connect to someone if willing to provide me with advice. I live in the Houston, Tx but I am originally from Chicago,IL. I am mostly interested in the Chicagoland area. I have searched the Houston area and not as much luck(I may be looking in the wrong area).

My goal is to hopefully start with multi-family no more than 3 units per property. Plan is to buy one property a year for the next 5 years. I want to hold these units for sometime and collect rental income. 

I am looking to buy a place and rehab.  Problems I am seeing in Houston, a lot of new construction and the numbers are not working due to the cost of the new units. Chicago has some homes I have come across low prices but may need a lot of rehab.

I am also looking into what pitfalls to be aware of when trying to do a rehab project on homes in major needs of upgrades in Chicago. Zoning laws permits ects. 

I am open to the price point of 50k-150k purchase plus about another 50K-100K for rehab. 

Would also like to rent out to section 8 tenant if possible. I have checked into starting the process but it seems as if you need to have the property to apply.  

Just going to comment on your statement- "I checked into starting the process but it seems as if you need to have the property to apply".  This is only true if you're approaching certain private lenders. There are many lenders who will provide you with a pre-qualification letter for purchase and renovation.  These will be short-term or hard money loans.  Once you've completed the renovation and have a tenant(s) then you can apply for a long-term loan.  It's the 2nd part of the process where you need a property to apply.

[Kendall Moore]

Quote from @Eliott Elias:

Houston is a great market, so much demand and so much diversity, there is almost any type of asset class you can imagine. Happy to connect you with wholesalers out there 

 Hi if there are any multifamliy units I would love to hear about them. I've checked and did not have much success.

[Kendall Moore]

Quote from @Nathan Gesner:

Quote from @Kendall Moore:

You can find more multi-family in Chicago for under $200,000 but there's a reason. Chicago doesn't appreciate as well as Houston and is a lot more difficult for Landlords. Those properties under $200,000 in Chicago look pretty rough. And how are you going to renovate and manage them while living in Texas?

I would consider looking at markets that are affordable without the tenant-friendly regulations.

 I am originally from Chicago. I visit often and have a lot of contact there for repairs if needed. I also hope to move back there some day if possible.  

[Jonathan Klemm]

Hey @Kendall Moore - It's awesome to see you jumping into the real estate game.  I think you'll find, as you can see from the above comments, there are a ton of knowledgeable people here on BP and specifically in Chicago.

I personally like Chicago for the exact reasons you mentioned......multiple price points of entry and an endless about of multifamily properties in need of renovation.  The key to making sure you get started on the right foot is to build a solid team, I can't stress the level of importance especially if you are investing out of state.  It will be well worth a plane ride to come meet some people in person.  Happy to connect you with some savvy Chicago realtors, lenders, attorneys, etc.

Section 8 is great, but can go south fast if you don't have a property manager that understands all the systems.