I'm a young professional ready to buy my first piece of property in Chicago. I don't have the funds to buy an entire 2 flat or 3 flat (yet), but I COULD buy just one condo unit if I found the right one.
My question: is buying a single condo unit in Chicago a financially sound decision that fits into the BRRR mentality, or should I continue saving and renting until I can buy an entire building? As someone who would always prefer to DIY first, the idea of answering to an HOA does not sound fun. I'm also afraid it would sap my cash flow. However, I would love to start building equity and pay rent towards a mortgage rather than burn it on rent, and a condo seems like a good beginner property.
@Luke Shaw , It all depends on where are you looking to buy. I have a lot of clients from out of state and out of the country that buy in Downtown or close to Downtown, by transportation and the values keeps climbing at a very high rate. The rental market is very strong in Downtown and you get very good tenants!
Let me know if you want to talk more about your options!
It depends what kind of condos. Also need to check it's rental friendly (and likely to stay like that).
A high rise condo will have a much higher % of the rent going to assessments and this number will increase more and more as the building ages over time often even resulting in a decrease in value (just look at far north side lakeshore condos selling under 100k with $1000 assessments).
On the other hand 1 unit in a 4 unit greystone will have much lower assessments then a high rise. Typically $150-300 a month. There will be special assessments here and there but you would need to do these repairs if you owned an entire building also.
As-is condos are usually all cash. I would recommend just buying a ready to rent condo doing a 3.5-5% down owner occupant mortgage living in it for 12 months then renting it out rather then BRRR. Being in it for such a low amount of down payment you should easily be able buy another property a year later.
Check out West Town. Lots of nice cashflowing condos over there. Feel free to PM me for more info.
Buying something is often better than buying nothing. Typically a 2-4 unit is a better investment than a condo, generally speaking. But if it takes you another few years to save up the funds and/or to get comfortable with that purchase, whereas a condo is within reach now, then the condo is worth considering. While you wait, rates rise and more money goes out the window on rent. So, unless that 2 to 4 isn't too far away, I'd say the condo isn't a bad place to start. That said, you need to buy smart with that condo. They come with their own set of strategy.
Alternatively, if a 2 to 4 doesn't scare you, you could consider certain grants to help with down payment. Hope this helps! Hit me anytime with questions.