Rental Property Investor · Seattle, WA · Member since 2016 · 53 posts · 23 votes
I'm looking to invest in potential turnkey properties in some of the South Chicago suburbs like Dolton, Matteson, South Holland, and Lansing. I was hoping to chat with some locals who either live in the area and preferable invest in those neighborhoods to get a feel what they are like. I know that the taxes can be very high but the rents seem to make up for the high tax rates. I'm happy to share any insight into the Seattle and western Washington markets. Thank you advance!
Investing in the Chicago South Suburbs depends on your strategy. If you're investing 100% for cash flow & intend on holding the property forever then it's just a matter of running your numbers for rent minus expenses to see if you can hit your target profit margin.
If however you're concerned with cash flow & potentially selling your property later w/ either a small appreciation in price or at least no reduction in value then you need to be careful where you invest in the South Suburbs. We stopped purchasing Single families to hold quite a while back but we do purchase to flip & have done a few deals in the South Suburbs that are also areas where properties are available for buy & hold. Areas we like that fit these criteria: Burbank; Calumet Park; Chicago Heights, Country Club Hill; Glenwood, Lansing, South Holland; Matteson & Richton Park.
I'm sure there are opportunities in Dolton but we've taken it off our list because we always had difficulties w/ the village when we owned property there. Then we could never make the numbers work for any future purchases.
There seem to be good cash flowing deals on 5+ unit properties in areas like Chatham, South Shore, and Auburn Gresham. I visited the South Side years ago and I've heard the area is changing a lot. I'm from the Miami area and have never been on the ground in these specific neighborhoods. Any feedback on the current situation there?
@Crystal Smith@Elbert D. When you say difficulties with the village are you referring to ridiculous tax increases from year to year? Thanks for replying!
Each village has different legal requirements for the inspection, renovation & occupancy of properties. Some villages are consistent, easy to work w/ & operate like it's the 21st century. There are some villages, like Dolton, that are inconsistent w/ poorly trained inspectors. Then on top of that, the IT system used by the village feels like it dates back to the 1950s. As we evaluated doing business in Dolton we determined that the village was so starving for revenue that they were nickel & diming us not because there was anything wrong w/ the property but because they could charge us every time an inspector came back out. Just wasn't worth it so we stopped investing in Dolton.
@Marc Eatmon yeah the south side is slowly changing overall. It's because the north side is close to its ceiling of getting better. It's so expensive to live up north but overall the north side is much more developed than the west and south side of chicago. So there are fewer opportunities to provide value. Every now and then there may be occasions to grab something not too pricey and flip it. But if you want more info just PM me and I can give you the full run down. I love to work with out of state investors looking to invest in chicago. Also keep your eyes open for Northwest Indiana it's considered an extension of chicago as well.
I presently have three rentals in Matteson. Their permit process has been painless. I get a good quality tenant. I've had zero problems with the neighborhood. The only minus is that values have been stagnant and as already mentioned, the property taxes of Crook County.
So glad I came across this post as I am looking at some buy/hold opportunities as well with phenomenal CCR's in these areas and in Aurora, IL. Am very eager to make a move on these deals, but my private funding partners I have available right now are being a bit hesitant about these markets. I have provided them with ample amounts of due diligence, but would love to find someone having success to help me get some pointers on getting these guys fully bought in!
Kevin,
I am looking in the markets you mentioned and love them. Have you invested at all in Sauk Village, Park Forest or University Park as well?
Sam,
Send me a PM I would love to see what you think of these deals from the perspective of an out of state investor!
So the investor who chases ROI in the areas that look easy.. When you need to evict in cook county and it takes 6 months and then tears the place apart. let me know what the ROI looks like.
@Ibn Abney do you prefer Seattle over Chicago? Its been a while sicne I have been to Seattle but for some reason I vist Chicago often and it steal my heart every time.
love love love Chicago ! Renters should be section 8 which is a sure rent ,which beats chasing rents from regular tenants! Prices and taxes are overall much lower than south suburbs which are starving for revenue as Crystal pointed out. multifamily properties in Chicago are more plentiful as well. SFH with only one rent option don't have any cash flow when that one unit is vacant.
Seeing this thread now. I have a property in the area. @Sam Denny: The properties directly south of the south of Chicago are C class properties. If you move slightly to the Southwest, the properties are more B class. Oak Lawn for instance is a nicer area, nicer schools, slightly lower profits.
Does anyone know of a good contractor that works in the area that does multi-family rehabs? Any recommendation would be appreciated. Thanks.
In southside chicago and southside suburbs there are a lot of pockets that you need to stay out of totally and then some right door are great. Reach out to some like Frank Montro with Keller Williams Realty does a lot of investor business. He is very good. Tell him Andrew Holmes says hello.
He is a friend and he cares about your investments. I have had him come and speak on our radio show and at Chicago REIA on a number of occasions.
The south areas can be a great market but a lot of people run after returns and ignore the other basics a huge mistake in southside or in the south suburbs.
Re-invigorating the thread. I have a couple homes in Matteson & Chicago Heights and plan on acquiring more. Can anyone recommend a good property management company for the area?
Investing in the Chicago South Suburbs depends on your strategy. If you're investing 100% for cash flow & intend on holding the property forever then it's just a matter of running your numbers for rent minus expenses to see if you can hit your target profit margin.
If however you're concerned with cash flow & potentially selling your property later w/ either a small appreciation in price or at least no reduction in value then you need to be careful where you invest in the South Suburbs. We stopped purchasing Single families to hold quite a while back but we do purchase to flip & have done a few deals in the South Suburbs that are also areas where properties are available for buy & hold. Areas we like that fit these criteria: Burbank; Calumet Park; Chicago Heights, Country Club Hill; Glenwood, Lansing, South Holland; Matteson & Richton Park.
I'm sure there are opportunities in Dolton but we've taken it off our list because we always had difficulties w/ the village when we owned property there. Then we could never make the numbers work for any future purchases.
I am looking to buy properties and hold for long term and do what Brandon says BRRRR. I grew up in Homewood and before i moved out west i knew the south burbs well. Glenwood, Lansing, Flossmoor, Thornton, Dolton, Chicago Heights, Calumet Park, Richton park, Matteson and south holland and CCH, my question is how are those areas now. Not looking to do flips, just BRRRRs. so like you said its a question of the numbers of what market rents will bring minus your expenses. I talked to a few investors who already have a few rentals in those areas and they said that 300-400 a door is very possible if your acquisition and rehab is at good price points and refinancing and appraisal comes in at or near comps for properties like yours in those given area's. Would you say for your buy and holds that you have a similar profit margin per door?
@Mike G. Our hurdle rate for 2019 is 17.5% per property. On average our portfolio returns between 10 & 20% per property. We don't use $/door as a profit margin criteria.
Our hurdle rate for 2019 is 17.5% per property. On average our portfolio returns between 10 & 20% per property. We don't use $/door as a profit margin criteria.
Hurdle rate being the % of return at or above the WACC figures? Those are good figures for a portfolio. What does your rental portfolio consist of? all single family?
I'm looking to get my security deposit back from Mike Fisher get cash flow inc. New Lenox IL. I left the house in excellent condition have pictures and videos to prove it. Him and the owner kept my $1800. This is not a good company to use to invest your rental property. They are crooks dis honest don't care about your property or the tenants that rent your property and thats why tenants move out fast.