Chicago, IL · Member since 2017 · 2 posts · 0 votes
Hello!
I am looking to invest into a 6 unit apartment building on the South side of Chicago in gentrified neighborhood. How do I perform a market analysis to see if this would be a good investment?
Also, is it wise to invest in a multi-unit as my first investment property? I see most people invest in single family homes, but I am more interested in small multi-units.
I don't think it matters if your 1st investment is single or multi family. Are you going to be managing yourself or property manager? It all depends on the deal. If the deal is good enough, you will find money from private/hard money lenders etc..or if the property is already rented you can get commercial bank lending as well.I just suggest, you read blog posts on BP, listen to podcasts, read books, go to local RE meetings etc to gain knowledge and network which will help a lot. Cheers!
Chicago, IL · Member since 2017 · 2 posts · 0 votes
9y
@dhru
Thank you for the advice. I would prefer to have a property management company manage the property especially since this is my first time. I am going to look at the property this weekend and run the numbers. I love the direction the south shore neighborhood is going and I want in.
Realtor · Cleveland, OH · Member since 2015 · 2k+ posts · 857 votes
9y
Your realtor should be able to give you comps of the area, so you can see what previous buildings sold for. Probably going to have to calculate sq/ft dollar average to get you a rough figure
I am looking to invest into a 6 unit apartment building on the South side of Chicago in gentrified neighborhood. How do I perform a market analysis to see if this would be a good investment?
Also, is it wise to invest in a multi-unit as my first investment property? I see most people invest in single family homes, but I am more interested in small multi-units.
Thanks in advance
Which south side neighborhood is it? IMO, Hyde Park is really the only south side neighborhood that I would consider to be gentrified.
What are the rents and what is the purchase price? Do the math and the math will tell you if its a good investment or not.
Managing a 6 unit will be a challenge for someone with no experience. Do you have a property manager? What kind of condition are the units in?
Personally, I recommend starting with a 2-4 unit and live in one of the units so you can get owner occupied financing.
I am looking to invest into a 6 unit apartment building on the South side of Chicago in gentrified neighborhood. How do I perform a market analysis to see if this would be a good investment?
Also, is it wise to invest in a multi-unit as my first investment property? I see most people invest in single family homes, but I am more interested in small multi-units.
A market analysis won't necessarily tell you if it's a good investment. You determine if it's a good investment by getting the financials on the property from the owner. The financials should show how much income the property is producing along with expenses allowing you to calculate the Net Operating Income (NOI). You can hire a realtor or use tools like rentometer.com to determine how the rents compare to others in the area. You can also have a realtor help you w/ CAP rate for the area in order to determine the potential value of the property.
Nothing wrong w/ investing in a multi unit as your 1st investment.