Hey Bigger Pockets,
My girlfriend and I have been building up the courage (and knowledge) to get started in real estate investing for the past few months. I recently found Bigger Pockets and have loved reading the forums and listening to the podcasts, but I figured that if I just kept reading and listening, I'd never get started!
I'm an engineer and work up in the far Northern suburbs, and Steph is a teacher that works at a school in the North of Chicago. We have a few months left on our lease, and want to find something in the North side of Chicago or the Northern suburbs.
From everything we've read and listened to, it sounds like a great way to get started is to "house hack" with a small multi-family property. Do you have any advice for first time property investors interested in starting out with buy and hold properties? Is that a good way to get into investing? A few of my friends that invest in real estate have told me that flipping is the best way to go, but buy and hold just seems to make more sense to me (and line up with our skill sets..).
If anyone has a good investor-friendly real estate agent that is familiar with North Chicago and the Northern suburbs, I would really appreciate a referral. Does anyone have suggestions about how I could get some hands-on experience or meet others to learn from?
Thank you for your help and all of the valuable insights I've already been gaining from this site!
@Devin Drowley - Welcome to BP! There are many kinds of REI to get into. IMO flipping is a "job" meaning it requires you to be here to make money and it great for immediate gratification. Buy and hold is more of a long term plan focused on replacing your income with cash flow.
"house hacking" is a great way to get started, it is how I started and many others have.
I don't know the burbs but if you have any question on the city I can help.
Make sure you get info from Brie Schmidt on the upcoming networking events to expand your network. The market has changed in Chicago in the last 12 months so your best next/first step is going to surround the opportunity to get your best deal on either a SFH or Multi. There are still good deals out there but they are getting more rare or there is more add value needed to opportunities which makes them difficult for beginners to take on.
In my mind buying a SFH that is a steal city or burbs is just as smart of a move, if not smarter, then buying and ok priced multi right now.
If you want a good agent referral on BP....ask the specific questions/new forum on here "Looking for investor friendly Chicago north suburb real estate agent" and people will chime in and get you some options.
@Devin Drowley we're helping a few clients from out of town find their 1st multifamily to house hack. The difference between the clients? Some have a strong stomach and no problem w/ taking on a full gut while others want move in ready. One is in the western burbs, the other in the north. Where you should start depends on your current financial situations, disposition/patience, vision...
- Attend @Brie Schmidt monthly Shark Tank meet up. Take it all in, listen, learn. Start developing your strategy based on what you learn and your own situation
- Find a local group that plays Robert Kiyosaki's Cash Flow game. It may help you solidify your strategy because the game is all about the numbers & your finances. You play the real estate game on the board and then go out in the real world and play for real.
- Start looking @ different types of properties - full gut to move in ready. You're instincts will tell you what you're ready for. You'll also find out if you & your partner are on the same page.
In the perfect world you'll find a property to property to house hack where one section is move in ready while the other will require some renovation. In this scenario you'll have the best of both worlds, buy & hold, w/ some renovation that improves the value of the property. When you complete the renovation & put a tenant in you can then decide whether you want to repeat the experience.
Welcome to the BP community. You'll find amazing people and great advice on this site!
As a beginner, and not a homeowner yet, I'll advice you to buy a 3-4 flat with a 3.5% FHA loan and if the building needs work, you can also do a 203K construction loan.
If you work the numbers well, the additional rents could pay for most of the expenses of the building and you could live for free in the smallest unit.
I bought that way and I have a lot of clients buying just like that.
Let me know if you'd like to talk further!
Lumi Ispas, Real Estate Agent in IL (#475.113981)
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