Indianapolis to Chicago

17 Replies

I was just getting started in real estate investing in Indianapolis but moved to Chicago for other reasons. At first glance seems like the Chicago market is saturated and every single property has an HOA fee which I've heard to stay away from. I haven't found any kind've meetings to go to that are actually in the city. Are Chicago condos also bad to flip on top of investing for cashflow? Just looking for some direction here in a new city. Any info or tips is appreciated regarding the Chicago Markets.

I would think it depends on what criteria you are looking for.  If you are only looking at condos in the city, I think you will be more limited than if you venture into the suburbs.  

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@Jonathan E.   . She is my broker and did an amazing job searching for cash flow possible properties and coaching me as a first timer. Biggest advice I can give is be patient and be open to renovations. 

I did not want to renovate, but, ended up considering doing so because of lack of options. 

Now that this one came along, I'm meeting my initial intention for entry as a  rent-ready buy and hold multifamily house hacking investor. Yes!!

The building Danny is buying is sort of an anomaly.... but we looked at more than a few good investment properties. But in River North when the average 2 bed condo is $500k and the average rent is $3200 it is already a awful investment before adding the HOA fees in

HI Jonathan, 

Keep looking in West Town up to East Humbold Park and North around the highways, you should be able to find some properties. Also, now is the time to buy. During the Spring and Summer the competition is fierce as everyone's leases are expiring, however, as the cold has hit the city, a lot of investors are going in vacation and a lot of the owner occupants buyers decide that they should start again looking in the Summer.

@Jonathan Emerick  is right about the fact that most of these buildings are old, however you could also do a 203K FHA construction loan and remodel a old building and raise the rents dramatically.

@Jonathan E.  

We own a few hoa townhouses and while they work, I personally would NEVER buy HOA again if I could get away with it! I wouldn't limit yourself to something in a specific neighborhood because you are close. If you get your "systems" under control. It is very possible to manage from a distance. I live 3,000 miles away from 3 of my properties. While it is by no means my "1st" choice. It certainly has been a stressfully process now and than but never financial. We have houses local too but we buy on the best investment and not the distance from our house as that can change.

@Jonathan E.  

Property taxes in Cook County are atrocious cashflow killers. From what I have normally seen, property taxes in Chicago are often 2-3 times higher than that of Indianapolis' suburbs in say Carmel, Zionsville, Greenwood, etc.

This could come back to bite you if you aren't carfeul.

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I think buying properties close to home is always the best option.  However, I myself live in New York where finding a cash flow property is out of the question.  So I've invested in Las Vegas, and more recently in Indianapolis.  I'd say Indianapolis is probably one of the best markets for cash flow properties right now.

@Jonathan E.  It depends,,,, I do not know Indianapolis well but I was checking out the market not too long ago and a local investor/agent gave me examples of numbers to expect and it wasn't more than I was getting in Chicago.  

What I am telling you is that Chicago is a huge market.  Looking in one area like River North is like eating one popcorn jelly bean and proclaiming that there are no good jelly beans.  

I just spoke at the RE Summit this past weekend about investing opportunities here. These are 2 "average" examples of North Side properties I found on the MLS in about 10 minutes

@Brie Schmidt  I don't know anything about the Chicago market.  I'm sure you know much more than me, and it looks like a lot of posters have positive things to say about you.  I wasn't trying to compare Chicago to Indianapolis.  I was simply pointing out to Jonathan that if he is having a hard time finding something that makes sense to him close to home, then Indianapolis is always a great option since he was considering it. 

As far as numbers, it all depends where in Indianapolis you're looking, and what your investment style is.  You can find single family homes in downtown Indianapolis for less than $50k that rent for $700 a month.  If you want to go multi-unit then I've seen 3-4 unit homes for around $100k with each unit renting for $500-$700 a month.  Lets not forget that property taxes and insurance are pretty low in Indiana.  I'd say a cash on cash return of 10-15% is average.  If you look hard enough you can still find deals returning as much as 20%.

Personally I just started investing here.  I've been focusing more on the surrounding suburbs.  I generally like to buy newer homes (built after 2000), in higher income areas, with top rated schools.  That also means that I'm willing to accept lower returns.  I'm about to close on my first property.  I'm paying $132k and its already rented for $1300 a month.  Its located in an excellent neighborhood just north of Indianapolis, and it has some of the top rated schools in the state.  Property taxes are $934 a year, and I was quoted $788 a year for insurance.