Knowing your market

[Brie Schmidt]

My husband and I started looking for investment properties late 2010. We saw so many properties in so many areas before finding our first in June 2010. Since then I have alerts on Redfin and at least glance at every property listed on the North side of Chicago. Even when we are not buying I look at the alerts and start to realize trends in certain neighborhoods, ect.

Well this time it really paid off. Last March a house came on the market in the North Center neighborhood for $299k, it was quirky (used to be a psychic reading place) and was partially converted from a 2 flat to a single family. But that area is well established and in a good school district. We had always planned on buying another investment property before buying one for ourselves but at this price point we couldnt pass it up. Within 3 days they had 12 offers and with a 325k offer we won the bid. After months of BS with Chicago zoning we finally closed in June. The house needed a new kitchen and mechanicals but we ended up putting 70k in (mostly personal choices not really geared at adding value) so we completed it in September and we all in for $395k - well we got the appraisal back today for $575k and are ecstatic. I know part of the increase is from the rehab - but I also think we bought it at least 100k under market.

This was our first rehab and while it is not an area of business we usually do - smart buying really paid off for us.