Investing in Low-Income Areas (Chicago Suburbs)

[Mark Cios]

I have been looking at the market almost daily for the past half year as my wife and I are currently selling our house as part of a contingency on another property we are planning on buying. After remodeling, we should have a substantial amount of money in the bank with which I planned on starting to invest with. We live in the southwest suburbs of Chicago and I have been looking at possibly condos to rent out but more recently I began to look into cheap houses. I am not entirely familiar with the areas that I am looking at, although a $30,000 home is very affordable. How do you determine what areas you want to stay away from and where you are good with working in. I am particularly looking into the Park Forrest/Chicago Heights areas which I do not believe is very violent. Does section 8 housing play a role in your decision making? What am I looking for in these areas to know it can make money? I am fairly confident in my ability to inspect a house and know how much money I would need to put into it, just not sure how to determine how much is too much in a low-income area.

[Ibn Abney]

@Mark Cios I am no expert, but I have a unit in the Pullman area and looking to expand. I chose Pullman because it is a national park/historic district (1st in Chicago), recognized by the US park Service. Also has a Metra, highway, two colleges nearby, and new commercial development (walmart, potbelly, ross, planet fitness, etc.)

Moral of the story, look for stuff that attracts good tenants. Low income areas are not the same as a warzone!! understand the difference is the first step!! Put feet on the ground and do not shop by price.

Usually transportation and commercial development is key. I don't do Section 8 housing either! Not everyone uses gov assistance. 

good luck!