Buying my first property.

Real Estate Agent · Chicago, IL · Member since 2018 · 1k+ posts · 1k+ votes

1y

I recommend getting started by house hacking, ideally a 3-4 unit property for better cash flow potential. $30k should be more than enough cash to purchase your first house hack, especially if you're using a VA loan (0% down), although by putting 0% down your expectation for cash flow should be pretty low unless you're making improvements to the building.

For paying off the debts, I recommend focusing on the credit card debt.

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Joseph BeilkeBusiness Member

Real Estate Agent · Palm Coast, FL · Member since 2018 · 363 posts · 243 votes

1y

I'm not at all familiar with the Chicago area, but I can chime in regarding earning more cash flow with your plan.

I would do a little of both—pay down your credit card while also saving the amount needed for closing costs, as well as additional funds for fixes, replacements, and repairs. The property you should focus on is one that needs improvements and upgrades but is still good enough to pass a VA appraisal inspection. You can live on one side and make the other side a very desirable rental. That unit has the potential to bring in top rent with a great tenant, and in the meantime, you can work on upgrading the side you live in.

With a 100% loan, it's unlikely you'll be able to cover the mortgage with rent from only one side, but your cost of living will still be reduced. This will give you extra money to save toward another property, allowing you to make a larger down payment and fix it up for another great tenant.

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Aaron ZimmermanBusiness Member

Accountant · Chicago, IL · Member since 2018 · 2k+ posts · 1k+ votes

1y

I agree completely with@Paul De Luca. Pay off the high interest debt (credit cards) asap. Then, aggressively save towards buying a 2-4 unit. Chicago has loads of 2-4 unit inventory. It has Gotten harder to find property with interest rates and low inventory but not something to get discouraged over.

I'd recommend going to some local meetups to prepare yourself for your house hack by meeting people and listen to the straight up Chicago investor podcast

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Jonathan AlvarezPro Member

OP

Member since 2019 · 2 posts · 2 votes

1y

Thank you everyone for the advice, I really appreciate you all taking the time to answer my question. I listen to a lot of podcasts at work and I will be adding the Chicago investor podcast to my daily listening list.

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Tj FlorosPro Member

Real Estate Agent · Chicago · Member since 2025 · 95 posts · 74 votes

1y

Quote from @Jonathan Alvarez:

Hey BP community, looking for some guidance on my situation. My lease ends in March of 2027, I am looking to stop renting and get myself into a home. House hacking or a live in flip is what I want to do. A duplex is ideal for my situation but I haven't seen many on the apps I've been looking on. I am a union electrical Apprentice so I plan on putting in a lot of sweat equity into the property. I am a veteran so A VA loan is what I plan on using, unless anyone has better suggestions. My question is, should I focus on paying off my debt which is credit cards and a car loan roughly about $20,000 in total and go to the closing table with no debt with enough for closing cost and a little bit in reserves or should I focus on saving more for closing costs and reserves and go to the closing table with more cash in the bank account? I was thinking having about $30,000 for closing costs and reserves for a multifamily would be enough, is that be realistic? I'll be earning around $90,000 stating in May 2026 with another pay bump in 2027. Thanks in advance I'm excited to become a part of the community.

Hey Jonathan,

I actually used my VA loan to buy my first house hack a couple years ago, and I actually got a check at closing, so I came to the closing table with no money out of pocket. It's not uncommon for veterans to either have no closing cost or extremely low closing cost, just depends on the deal and the veteran.

If I was in your shoes I would worry more about the debt side, paying off credit card or whatever debt you have in that 20k which I'm guessing if from the car note.

You make good income and "shouldnt" have a problem getting a loan. I would target a 3 flat or 4 unit that is turn key. If you can buy in a good part of the city with 0% down you might as well buy recent rehab or go the different direction and try to build some equity with a rehab.

I will say though getting an VA offer accepted can be somewhat hard depending on the neighborhoods you are targeting. It took my 8 months to get a building when I first started lookin back in 2022.

definitely come up with a game plan on what your investing goals are especially when it comes to a VA loan. If you need help or some advice on how to get the most of out the VA loan I'm happy to help. As a real estate agent that helps other veterans buy 2-4 units I know the challenges that come with it but it's worth it and hands down the best loan product.

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Micah White

Real Estate Coach · Chicago, IL · Member since 2020 · 171 posts · 64 votes

1y

Hey, welcome! Sounds like you've got a solid plan — house hacking with a VA loan is a powerful way to get started, and the fact that you can put in sweat equity as an apprentice gives you a big edge.

On the debt vs. reserves question, it really comes down to balance. Having reserves is critical because unexpected costs come up quickly with a duplex or live-in flip, but too much high-interest debt can eat into your monthly flexibility. From my experience, most new investors do best by keeping some reserves on hand while also chipping away at debt so they’re not overleveraged going into their first property.

Your target of ~$30K in reserves sounds realistic, especially paired with a VA loan, since you won't need as much upfront for the down payment.

I’ve worked with a few new investors in a similar spot, and what helped them most was creating a clear framework for financing and deal analysis so they went into their first purchase with confidence. Happy to share more on how I approached that if you’d like to connect.

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Crystal SmithPro Member

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Real Estate Broker · Chicago, IL · Member since 2014 · 2k+ posts · 1k+ votes

1y

Quote from @Jonathan Alvarez:

Hey BP community, looking for some guidance on my situation. My lease ends in March of 2027, I am looking to stop renting and get myself into a home. House hacking or a live in flip is what I want to do. A duplex is ideal for my situation but I haven't seen many on the apps I've been looking on. I am a union electrical Apprentice so I plan on putting in a lot of sweat equity into the property. I am a veteran so A VA loan is what I plan on using, unless anyone has better suggestions. My question is, should I focus on paying off my debt which is credit cards and a car loan roughly about $20,000 in total and go to the closing table with no debt with enough for closing cost and a little bit in reserves or should I focus on saving more for closing costs and reserves and go to the closing table with more cash in the bank account? I was thinking having about $30,000 for closing costs and reserves for a multifamily would be enough, is that be realistic? I'll be earning around $90,000 stating in May 2026 with another pay bump in 2027. Thanks in advance I'm excited to become a part of the community.

It looks like you are getting a lot of great advice. Take your monthly take home pay with your current debt then ask the VA what kind of mortgage you would qualify for (Total amount and monthly PITI). With that information then partner with a realtor to take a look at the market based on those preliminary numbers. Part of your assessment with that realtor will be what kind of cashflow will the properties produce relative to your payments. With that information you can then start developing a plan to increase savings while driving down your current debt.

Regarding reserves- In my opinion having reserves is probably the most important consideration. Stuff happens and the reserves are needed to handle it.

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Eric Flatt

Chicago, IL · Member since 2018 · 31 posts · 33 votes

1y

My first investment was a house-hack and the home was a duplex in Chicago. Similar to you, I was going from renting to buying my first property. The strategy worked out quite well for me and I still own the duplex to this day. I bought my first two flat with only 5% down (FHA loan), and that was about $17,500 7 years ago. While these figures may not translate today, I'm sharing to say that you absolutely can make it happen and as others have said, Chicago is a great place to do it. I spent a few years paying off all consumer debt so I'm a proponent of that strategy. It's hard because you have to be patient, but it really helps when you enter your first property as the reduced personal expenses helps with managing the costs of your fist investment property. I'm happy to talk more transparently about my first deal if you like. DM me!

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Buying my first property.

Buying my first property.

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