Five months ago I closed on my primary residence, a 3/2 condo here in Chicago. After renting out the other two bedrooms to pay for the mortgage, I quickly witnessed how much more you can save when you're not paying for housing.
This week, my offer on a 2/1 condo in the Albany Park neighborhood was accepted. I'm putting 20% down on a 30-year loan. Here are the numbers:
Listing price: $140,000
Purchase Price: $122,000
Cash Needed (DP + Closing Costs): $25,820
Rent: $1450 (median rent for 2br in neighborhood is $1395, but I am also providing covered garage parking, plus basement storage unit)
Monthly payment (including HOA, property taxes, insurance): ($955)
5% Maintenance: ($73)
5% vacancy: ($73)
CapEx: Included in monthly HOA payments (building is 12 units and has $28,400 in reserves)
Utilities: Heat and water in HOA; electricity in tenant's name
Cash Flow: $349
I know that there are mixed reviews on condos, but aside from wildly overpriced MFRs, they are the primary form of housing here in Chicago. Especially for my first go at it, I found it really important to stay close to home, and this is 20 minutes (though I realize that, if I do one day bring on a PM, my cash flow would reduce to $200/month). Two of the building's 12 units are currently rented, and the HOA does not have any restrictions on that.
This may not be screaming deal, but I am 25 years old and I have done my research to ensure that my first crack at this journey towards financial independence will be profitable. Any advice or words of encouragement are always welcomed and appreciated!
Profit is profit! Get yourself enough of these deals so you never have to have a full-time job. By the time you've accomplished that you will have refined your strategy and if you back it with studying/learning it will be way better.
@Luke H. much appreciated. Once this is done, I'm excited to study more about HELOCs and other ways to snowball deals without ever again having to use any substantial amount of my own cash.
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