New Real Estate Investor Starting out in Chicago

11 Replies

Hello everyone, My name is Ryan, born and raised in the western suburbs of chicago and currently living at a 3 bedroom rental property in the city. Over the past few months I have been listening to bigger pockets podcast which has opened my eyes to the fantastic investment opportunities real estate has to offer. In the next few months I will begin my real estate investment journey, and am trying to determine the best strategy for new investors in Chicago. My plan as of right now is to house hack with a multi-family property, and make the initial down payment on the property with an FHA loan. I am questioning if this is the right strategy, or if I should begin my real estate journey with a single family property, given that I have been able to find less expensive property which will allow me to invest more capital in renovations. Neighborhoods I am looking to invest in are Logan square, humboldt park, Ukrainian village, Avondale and Pilsen. I am open to suggestions in other emerging markets in Chicago. I really appreciate any advice, and am very excited to construct a plan of action for buying my first property.

Welcome to the community Ryan! I also grew up in the western suburbs and have been house hacking my way to a portfolio of 11 units. Right now I live in Humboldt Park but have a lot of first hand experience in those other neighborhoods as well. A good first step is to start working with a lender to get pre-approved but I'd be happy to meet up with you as well to talk strategy!

@Ryan Schickerling Talk to a lender and find out what you can in terms of financing first so you don't waste a lot of energy looking at deals you can't buy. Anytime you can buy income property for your first purchase, you are coming out way ahead in the long run.

Welcome to BP and congrats on thinking through your next move. Knowing your financing options and linking up with a broker or someone who is knowledgeable about markets fitting your circumstance should be a priority. A single family in Avondale will be very different from a 3 flat in Pilsen. 

Also, consider a mortgage broker vs. traditional bank- both have advantages but typically a broker has more tricks up their sleeve to meet your objectives. Let me know if you like some names to consider. 

@Ryan Schickerling - Like others have said, it starts with financing. I would strongly consider the 5% Home Possible loan over the FHA for the first. It is cheaper, has higher loan limits, and can only be used on your first. Then you can do FHA on the second and use two low money down programs.

Originally posted by @Ryan Schickerling :
Hello everyone,

My name is Ryan, born and raised in the western suburbs of chicago and currently living at a 3 bedroom rental property in the city. Over the past few months I have been listening to bigger pockets podcast which has opened my eyes to the fantastic investment opportunities real estate has to offer.

In the next few months I will begin my real estate investment journey, and am trying to determine the best strategy for new investors in Chicago. My plan as of right now is to house hack with a multi-family property, and make the initial down payment on the property with an FHA loan.

I am questioning if this is the right strategy, or if I should begin my real estate journey with a single family property, given that I have been able to find less expensive property which will allow me to invest more capital in renovations.

Neighborhoods I am looking to invest in are Logan square, humboldt park, Ukrainian village, Avondale and Pilsen. I am open to suggestions in other emerging markets in Chicago.

I really appreciate any advice, and am very excited to construct a plan of action for buying my first property.

 Hey Ryan.  I am a fellow investor here in the city of Chicago.  I like the neighborhoods you listed and research them heavily.  I'd suggest considering looking a bit further up the blue line.  I have a 3 unit in Irving Park(the neighborhood directly north of Avondale) that I've done very well with.  Let me know if you'd like to discuss further.  

Originally posted by @Brie Schmidt :

@Ryan Schickerling - Like others have said, it starts with financing. I would strongly consider the 5% Home Possible loan over the FHA for the first. It is cheaper, has higher loan limits, and can only be used on your first. Then you can do FHA on the second and use two low money down programs.

I agree with this completely. I love the idea of tag-teaming a Home Possible Loan for the first property with an FHA for the 2nd. A great way to quickly build a portfolio with not a lot of cash up front.