Specialist · Chicago, IL · Member since 2015 · 870 posts · 345 votes
North Lawndale comes with a stigma, it appears to be a war zone in D areas. However, properties are cheap, and section 8 may provide some sweet returns.
Are you experienced in this area? If so, I would like to hear your stories, please. What are the pros and cons of investing in this section of Chicago?
Developer · Chicago, IL · Member since 2013 · 435 posts · 358 votes
10y
Hi Frank,
I'm very familiar with that area as well as others in Chicago at that price point/returns. The entire experience will come down to the team you have around you. Property management will eventually make or break your investment.
Developer · Chicago, IL · Member since 2013 · 435 posts · 358 votes
10y
Hi Frank,
I'm very familiar with that area as well as others in Chicago at that price point/returns. The entire experience will come down to the team you have around you. Property management will eventually make or break your investment.
Specialist · Chicago, IL · Member since 2015 · 870 posts · 345 votes
10y
I had been working just south and west of that area. However, the prices there and Section 8 options are worth researching. Yes, I don't want to get shot, so I need to do tons of leg work.
Convincing my wife to pick up a few properties here is going to be tough.
Steger, IL · Member since 2016 · 57 posts · 13 votes
10y
there are some MF that located at the border ow war zones, if crime move away from that border you might expect more equity + cash flow, if not than it's still that D area. Good luck!
The rewards can come but with high risk. Highly competent boots on the ground are needed to succeed in this space. The actual Sec 8 tenants may not be an issue at all. Its the total environment that is the challenge.
Plus in analyzing some properties in this asset class 3 factors alone can make or break success of a property. High Insurance, High Utilities ( if heating an old building) and Prop Taxes coupled with lower per unit rents can put you on shaky ground. If the buildings do not cash flow very well then you need to consider if is it worth the risk. There is money to be made but analyze every deal/property down to the dollar to ensure you have a significant reward for the potential risks involved.
If you (or your wife) are not totally at home working in those area's then you need to find someone reliable and trusty worthy that can work that field.
The rewards can come but with high risk. Highly competent boots on the ground are needed to succeed in this space. The actual Sec 8 tenants may not be an issue at all. Its the total environment that is the challenge.
Plus in analyzing some properties in this asset class 3 factors alone can make or break success of a property. High Insurance, High Utilities ( if heating an old building) and Prop Taxes coupled with lower per unit rents can put you on shaky ground. If the buildings do not cash flow very well then you need to consider if is it worth the risk. There is money to be made but analyze every deal/property down to the dollar to ensure you have a significant reward for the potential risks involved.
If you (or your wife) are not totally at home working in those area's then you need to find someone reliable and trusty worthy that can work that field.
RE:" lower per unit rents" : Actually, it's the opposite for section 8 in this area as compared with adjacent neighborhoods.
RE:
"If you (or your wife) are not totally at home working in those area's then you need to find someone reliable and trusty worthy that can work that field."
Specialist · Chicago, IL · Member since 2015 · 870 posts · 345 votes
10y
Are those in North Lawndale (NL)? if so, are those section 8?
E.g., a 2/1 in south lawndale can go for $ 750 B at 45/55K per door.
One can buy the whole building for 55 K in NL, and with setion 8 the rent money should arrive.... "should". Hence, the higher income.
Note, I'm not ready to jump in that area, but I think there is much better cash flow potential if played very, very, very carefully. It's expected, higher risks higher returns, right...
Investor · Chicago, IL · Member since 2015 · 3 posts · 3 votes
10y
@FrankSanchez I own a 3 Flat in North Lawndale (Homan and Roosevelt). You have to own a strong pair of B**ls to live or do business around here. Truth of the matter is that you can get shot anywhere. I'm probably at a greater risks because many of the drug dealers/gang members think I'm a narcotics officer, so that can make me a target. Anyway, I paid $72k in July 2015, I live on the 1st floor and between the two apartments upstairs I collect $1500.00/month in rent (my tenants are not section 8). I have put a bit of money on this building but I feel I'm still ahead. I wish more people would not just invest in this area but have the courage to live in their property as well, all we need is about 3 owner occupied houses per block... people who care for their property and will not put up with the drug dealing. I've had challenges since my purchase including an attempted break-in, but outside the crime, this area is a real gem... I have the Homan bus stop on my block, Roosevelt Rd Bus about a block away, and I-290 and Blue Line less than a mile north of me, not to mention Douglas Park which is now starting to attract music festivals and other positive events, which can someday attract potential (responsible) renters and/or buyers. You can limit and monitor the amount of "occupants" per apartment as well as stand firm against loitering (ie: prohibit tenants from hanging out on the front porch) in order to reduce gang activity. It's also important to find out who your potential allies can be ie: neighbors, police and yes even the head drug dealer... let him/her know you're not out to get them, but your building is off limits.
I drive by that intersection often, I have a renovation going on in South Lawndale. I'm somewhat familiar with the area, although I haven't seen any properties in the north side of Ogden yet.
Is your place a 2/1 or a 3/1? How many s.f. per unit? How much did you put to get the 3 flat up to rental condition? Do you have a garage? I would be interested in sharing some info with you at some point. I'm in the area every single weekend and often weeknights while working on my rehab.