Advice on Buying in Englewood Chicago
Dallas, TX · Member since 2017 · 9 posts · 2 votes
Advice on Buying in Englewood Chicago
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Rental Property Investor · Chicago, IL · Member since 2016 · 318 posts · 307 votes
9y@Account Closed Wasn't Oakland once a murder Capital? Within the past 10 yrs or so? Before San Fran went crazy, now folks are pouring across to Oakland?
I tell people ALL the Time. I am from Brooklyn NY. You probably wouldn't like my "hood" back in the 80s but now tears-downs are $900K+, as Manhattan cap rates fell.
Put feet on the ground and stop watching Fox News. South side Chicago is Next!!! Always happy to show out of state investors around! :-)
32 Replies
- Rental Property Investor · Oakland, CA · Member since 2014 · 730 posts · 1k+ votes9yI suggest you stick to a market that isn't the "murder capital of the US"
- 9yKenneth GarrettPro MemberInvestor · Florida Panhandle/Illinois · Member since 2016 · 4k+ posts · 3k+ votes
Just curious. What made you pick Englewood? There are plenty of locations to pick from. I know a few investors who invest there depending on the block it can be one of the roughest areas in the city. There are some pockets that are better, but overall its rough. The prices match the challenges of the neighborhood.
Good Luck.
- Dallas, TX · Member since 2016 · 1k+ posts · 745 votes9y
@Kendra L Lee HI Kendra, I live in Dallas, I used to live in Chicago. Chicago has some VERY major gang and crime issues right now, one of the worst in the country, unless you know the specific neighborhoods, I would not try and invest there.
I do know as a whole Englewood has some of the worst crime problems in All of Chicago. It absolutely is not a neighborhood to invest in from a distance. And honestly it might not be a place to invest in at all.
Unless I was a very experienced investor specializing IN the city of Chicago there is no way I would consider Englewood.
- Investor · Chicago, IL · Member since 2016 · 105 posts · 58 votes9y
@Kendra L Lee my advice: don't.
Englewood, and much of the immediately south/west side is a dangerous place. Most of our outside investors are putting money in the north side of the city, as well as some surrounding suburbs. I spoke with an investor yesterday from Texas who as properties in Mount Prospect, Arlington Heights, Palatine, and Vernon Hills.
Bottom line, stay far away from those south side neighborhoods.
- Dallas, TX · Member since 2017 · 9 posts · 2 votes9y
Thanks everyone for the advice. The property I was looking into already has 4 tenants and it is an 8 flat. There are a lot of properties in Chicago and I am looking to maximize my investment. I just want to explore all of my options. Someone just bought a 4 flat around the corner from the property I'm interested in, so I thought I might be able to do fine with the 8 flat even though it's in a rough neighborhood.
- Real Estate Agent · Chicago, IL · Member since 2016 · 283 posts · 71 votes9y
@Kendra L Lee stay close to 63rd and Halsted area. West side I would agree with what others have said and stay away
- Wholesaler · Myrtle Beach, SC · Member since 2017 · 276 posts · 80 votes9y
Hello Kendra... Illinois is one of our core states and we don't even lend in Englewood if that tells you anything. Feel free to reach out and connect with me if you questions about other areas. Thanks..
- Real Estate Broker · Chicago, IL · Member since 2014 · 2k+ posts · 1k+ votes9y
Originally posted by @Kendra L Lee:
Whether or not I should jump into an apartment building that needs to be rehabbed on my first deal, even though it is income producing? A
Englewood is not for newbies, especially out of town newbies. I recommend you choose another part of town for your 1st deal.
- Chicago, IL · Member since 2016 · 12 posts · 9 votes9y
Hi Kendra!
I will fully admit that Englewood is not the nicest neighborhood to invest in, but the value and potential is definitely there. The area has hit rock bottom since the housing bubble collapse, but that only means there's no where to go but up! I currently live in Chicago, and am actually wrapping up a fix and flip in Englewood with some great margins(for me at least).
The house was bought for 48k, we put about 90k of repairs into it for a total of 138k, and we put it up on the market for 185k. 2 weeks later, we had it under contract for 182k, for a total gross profit of 44k. Factor in closing costs and some credits to the buyer, and we're looking at at 35k net. Not too bad in the "murder capital of the US"!
Do be warned though, other investors aren't suggesting you shy away for nothing. We had a break-in late December and had about 4k worth of damages, as well as another attempted break-in 2 weeks ago while it was under contract. The area definitely requires someone on site to monitor the apartment and respond to any alarm signals. PM me if you'd like any more information or advice. Good luck with your investments!
Regards,
David
- Investor · Chicago, IL · Member since 2014 · 81 posts · 35 votes9y
I wouldn't suggest it as your first property. The crime and violence there is bad, but it's also a block by block kind of area. You would have to know the area or partner with someone who does for this kind of deal. As far as staying out of the entire south side, I know plenty of investors that are starting to invest on the south side because the north side is so competitive. I would just say the further south you go, the worse the neighborhoods get IMO. Best of luck to you, some people here have given you some good info.
- 9yMark AinleyBusiness MemberProperty Manager · Roselle, IL (Chicago Suburb) · Member since 2013 · 2k+ posts · 1k+ votes
@Kendra L Lee it is all about your Property Manager whether you make a move in west englewood or not. If you don't have experience with a PM that will manage this for you I would think twice.
Feel free to send me the address and I can advice you on what I know of that block.
GC Realty & Development LLC4.61078 Reviews - 9yVictor CollazoPro MemberInvestor · West Palm Beach, FL · Member since 2014 · 49 posts · 12 votesVery simple. Don't do it unless you plan on being on site. I have law enforcement friends that grew up and patrolled there but eventually moved out as the crime is not worth the risk.
- Chicago, IL · Member since 2014 · 710 posts · 200 votes9y
Originally posted by @David Zhang:
Hi Kendra!
I will fully admit that Englewood is not the nicest neighborhood to invest in, but the value and potential is definitely there. The area has hit rock bottom since the housing bubble collapse, but that only means there's no where to go but up! I currently live in Chicago, and am actually wrapping up a fix and flip in Englewood with some great margins(for me at least).
The house was bought for 48k, we put about 90k of repairs into it for a total of 138k, and we put it up on the market for 185k. 2 weeks later, we had it under contract for 182k, for a total gross profit of 44k. Factor in closing costs and some credits to the buyer, and we're looking at at 35k net. Not too bad in the "murder capital of the US"!
Do be warned though, other investors aren't suggesting you shy away for nothing. We had a break-in late December and had about 4k worth of damages, as well as another attempted break-in 2 weeks ago while it was under contract. The area definitely requires someone on site to monitor the apartment and respond to any alarm signals. PM me if you'd like any more information or advice. Good luck with your investments!
Regards,
David
Did it really close with only $9K in closing costs? Did you use a discount broker or something? 5% is $9K right there for commission + title, taxes, transfer taxes, survey, etc. etc.
- Flipper/Rehabber · Crown Point, IN · Member since 2009 · 482 posts · 216 votes9y
Kendra,
Why would you invest in one of the worst crime areas in the state? There's plenty of other far better areas to invest in. I live in Northwest Indiana, but I'm close to Illinois and know the Chicago area well. Invest in Indiana, the south suburbs of Chicago or other areas. But I would stay away from Englewood. Your headaches will be far less and your cash flow will most likely be higher. We offer investors sfr's for $50k all fixed up and ready to go. They rent for around $1000 and the area is far better than Englewood. David mentioned his flip, but he also mentioned a break in and a 2nd attempt. If you're up for that, go for it! Best of luck to you.
- Rental Property Investor · Chicago, IL · Member since 2016 · 318 posts · 307 votes9y
@Account Closed Wasn't Oakland once a murder Capital? Within the past 10 yrs or so? Before San Fran went crazy, now folks are pouring across to Oakland?
I tell people ALL the Time. I am from Brooklyn NY. You probably wouldn't like my "hood" back in the 80s but now tears-downs are $900K+, as Manhattan cap rates fell.
Put feet on the ground and stop watching Fox News. South side Chicago is Next!!! Always happy to show out of state investors around! :-)
- 9yDarren SagerPro MemberInvestor · Tampa, FL · Member since 2013 · 2k+ posts · 1k+ votes
@Ibn Abney in both cases you mention, Oakland and NYC, both real estate markets were driven by the concentration of technology companies that came into the area with jobs, attracting the youth with better jobs.
Chicago has............................. no technology companies wanting to set up shop there and the number one city in the US where people are leaving the area.
Without technology companies wanting to set up shop in droves, it's a dying city in my opinion.
- Rental Property Investor · Chicago, IL · Member since 2016 · 318 posts · 307 votes9y
@Darren Sager That is incorrect. Yes, tech jobs played a role to a degree in San Fran, but NYC not quite sure.
I would attribute the massively price appreciation more to international equity and housing markets after the recession. For foreign investors NYC and San Fran, is one of the safest places to invest. Many Chinese and Russian investors bought properties over asking price driving the market up.
As for Jobs, many larger companies are moving from downstate Illinois to Chicago: McDonald's, ConAgra, Caterpillar, Kraft-Heinz, Groupon, and Yelp to name a few.
Again put feet on the ground. Or just do a google search since your a tech guy.
When you compare cost of living vs. local economy Chicago is #1 on the list compared to NYC, San Fran, LA, Denver, Seattle and MIA.
- Investor · Chicago, IL · Member since 2016 · 515 posts · 247 votes9y
Originally posted by @Darren Sager:
@Ibn Abney in both cases you mention, Oakland and NYC, both real estate markets were driven by the concentration of technology companies that came into the area with jobs, attracting the youth with better jobs.
Chicago has............................. no technology companies wanting to set up shop there and the number one city in the US where people are leaving the area.
Without technology companies wanting to set up shop in droves, it's a dying city in my opinion.
http://www.inc.com/zoe-henry/3-reasons-why-chicago...
http://chicagoist.com/2017/02/06/new_ranking_names...The city of Chicago now has more than 40,000 tech jobs. The city has added more than 15,000 tech jobs since 2011.
- Contractor · Chicago, IL · Member since 2016 · 35 posts · 20 votes9y
Born and raised here, there is lot's of crime in Chicago, but as a researcher, I like to get my facts right. This is the perfect "Signal vs Noise scenario"..... As Saj Shah mentioned....Chicago is NOT the murder capital of the US. We didn't even make the top 10 list. https://www.forbes.com/pictures/mlj45jggj/detroit-6/#4ce365ed7971. In fact, I can't find us listed as top 10 on any legit list. Of course, there is crime to deal with here no doubt. For some reason Chicago is just "newsy" right now. In terms of buying property in a place like Englewood, or even where I live Roseland (which has it's fair share of crime reports) I think you really have to know your area Chicago is and always will be a hot market - Both these areas are under a Chicago Neighbor Initiative Objective. So these communities are slowly being rejuvenated and the demographics are changes. But it'll be a while before you begin to see fruits of the economic development underway. That's why I believe you really have to know these areas from the inside out. Good example is although Roseland has a notorious reputation, it's also home to a large amount of middle-class, college educated black people who take pride in ownership - and these areas have low crime rates. Crime is patchy in Chicago. I've included this piece of information of course in my strategy for searching for future purchases in the area. Lastly, if you're more specific about the contacts you need Kendra, let me know, I'll share with you what I can.
- Rental Property Investor · Chicago, IL · Member since 2016 · 318 posts · 307 votes9yOne more recent article: "There's a New Best City in America for Startups (It's Not in Silicon Valley)" http://www.inc.com/betsy-mikel/the-city-with-the-highest-percentage-of-insanely-profitable-startups-may-surpris.html
- Rental Property Investor · Oakland, CA · Member since 2014 · 730 posts · 1k+ votes9y
Originally posted by @Meleneal Cameron:
Born and raised here, there is lot's of crime in Chicago, but as a researcher, I like to get my facts right. This is the perfect "Signal vs Noise scenario"..... As Saj Shah mentioned....Chicago is NOT the murder capital of the US. We didn't even make the top 10 list. https://www.forbes.com/pictures/mlj45jggj/detroit-.... In fact, I can't find us listed as top 10 on any legit list. Of course, there is crime to deal with here no doubt. For some reason Chicago is just "newsy" right now. In terms of buying property in a place like Englewood, or even where I live Roseland (which has it's fair share of crime reports) I think you really have to know your area Chicago is and always will be a hot market - Both these areas are under a Chicago Neighbor Initiative Objective. So these communities are slowly being rejuvenated and the demographics are changes. But it'll be a while before you begin to see fruits of the economic development underway. That's why I believe you really have to know these areas from the inside out. Good example is although Roseland has a notorious reputation, it's also home to a large amount of middle-class, college educated black people who take pride in ownership - and these areas have low crime rates. Crime is patchy in Chicago. I've included this piece of information of course in my strategy for searching for future purchases in the area. Lastly, if you're more specific about the contacts you need Kendra, let me know, I'll share with you what I can.
I never said Chicago was the murder capital. I was referring to the Englewood neighborhood.
- Dallas, TX · Member since 2016 · 1k+ posts · 745 votes9y
Originally posted by @Meleneal Cameron:
Born and raised here, there is lot's of crime in Chicago, but as a researcher, I like to get my facts right. This is the perfect "Signal vs Noise scenario"..... As Saj Shah mentioned....Chicago is NOT the murder capital of the US. We didn't even make the top 10 list. https://www.forbes.com/pictures/mlj45jggj/detroit-.... In fact, I can't find us listed as top 10 on any legit list. Of course, there is crime to deal with here no doubt. For some reason Chicago is just "newsy" right now. In terms of buying property in a place like Englewood, or even where I live Roseland (which has it's fair share of crime reports) I think you really have to know your area Chicago is and always will be a hot market - Both these areas are under a Chicago Neighbor Initiative Objective. So these communities are slowly being rejuvenated and the demographics are changes. But it'll be a while before you begin to see fruits of the economic development underway. That's why I believe you really have to know these areas from the inside out. Good example is although Roseland has a notorious reputation, it's also home to a large amount of middle-class, college educated black people who take pride in ownership - and these areas have low crime rates. Crime is patchy in Chicago. I've included this piece of information of course in my strategy for searching for future purchases in the area. Lastly, if you're more specific about the contacts you need Kendra, let me know, I'll share with you what I can.
Chicago had more murders than New York City and Los Angeles combined. That is why you have a lot of news. There are major issues in the city with gangs. Some of the worst in the country for a major city. And Englewood is one of the worst neighborhoods in Chicago for violence.
Yes Chicago has good blocks and bad blocks, and maybe more than most cities is neighborhood centric. I grew up in Illinois, used to live in Chicago and used to tutor kids in Cabrini Green, I have a little understanding of the dynamics of Chicago.
But the OP is looking for their first deal, AND lives in Dallas.
Sorry Englewood might have some opportunities for a seasoned investor who knows Chicago. But it is crazy for an out of state investor to put their toe into he water by investing in Englewood. At the very least you might lose your shirt, at the very worst you might find yourself dealing with gang issues in an attempt to turn around a partially occupied apartment complex from a thousand miles away.
- Contractor · Chicago, IL · Member since 2016 · 35 posts · 20 votes9y
Sorry for the misquote Saj. Englewood IS a buz word with investors here and overseas. Even with that, because I don't know that area as well, I wouldn't venture into business over there yet. But I've met investors with strategies that are getting it done though.
- Contractor · Chicago, IL · Member since 2016 · 35 posts · 20 votes9y
You're right Bart, I wouldn't mess with Chicago unless you understand your market from the inside out. On top of that Dallas is far more business friendly than IL.
- 9yDarren SagerPro MemberInvestor · Tampa, FL · Member since 2013 · 2k+ posts · 1k+ votes
@Ibn Abney maybe everyone should read this:
I've been going to the larger NYC events for years. The lack of space for tech companies has been an issue for years.
So Chicago has some tech jobs. Nothing like NYC. The start ups are doing well because the access to capital is on site. Many have come out and said NYC will eventually overtake Silcon Valley. I do expect Silicon Alley (NYC) to overtake the west coast eventually. I think Chicago is great city however it wont probably be able to touch NYC long term because it doesn't have the international crowd that wants to be there. Food is great there. Some incredible architecture. Great hard working people. Crime has unfortunately gotten out of control in select areas but the Chicagoland area in general has seen a loss of people wanting to live there. Now some will say the same for the NYC metro area however those statistics don't show the influx of the international crowd coming in. The NYC area has always been at the apex of cost of living here. People will always move away from that to find better value. But it's still the place where most want to be both domestically and worldwide.
What most on these forums truly don't understand is how the United States is shifting to a more European cycle of where people live and work and we're not going back to urban sprawl. Anyone betting on that long term I think will be left behind. The greater Chicagoland area expanded like crazy during the last boom and has not recovered price wise compared to saturated markets elsewhere. People will continue to migrate to the coastal areas.
Are there areas in Chicago proper that are ripe for long term gains? Absolutely. But I personally don't think it's as safe as a bet as the NYC metro area (bar any foreign threat).
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