Please help evaluate a condo purchase in Chicago + timing
Hello everyone,
I am looking at a junior studio in Chicago, Lincoln Park area. Since I'm new to this real estate market, I'm hoping to get some insight from the pros on whether this is a good deal or not.
Here are the basics:
Priced at 190K, hoping to get 185+5K in sellers concessions for net sale price of 180K. Currently it's rented out for the next 2 months (red flag?). Rent is 1300$. The place seems clean and well-kept. 4 minutes from CTA station on brown/pink line. Trader Joes 5 minutes, WF 10 minutes walk, so is a major university. Downtown within a 20 minute train ride.
Running basic numbers, the pmi+hoa+taxes come up to about 1250$. I know, I know! Not meeting the 1% rule, BUT initially I would live in it. Not sure for how long (hence primary residence loan with 20% down).
Here are my questions:
1. How good of a deal is it for Chicago area, given the shortage of inventory?
2. What am I getting in if I purchase a *leased* property?
3. During my conversation with the realtor, she gave away a vibe that a market may be flattening given the incredible appreciation rate over the last few years combined with raising interest rates. I appreciated her honesty, but it does concern me. Should wait to purchase given the current state of the market (insane appreciation; incomes not keeping up with it), as well as the fact that cash flow would be negative if I had to rent it out for some reason (i.e. if economy went down and I had to move to another state for a job)?
4. Given Chicago's potential (or lack of it), is this a good buy and hold deal? Like I said, I currently live in Chicago, enjoy it and would rather not pay rent, but don't know how long I will stay here.
Also, ideally, I'd like to hold on to my properties for 30 years until they are paid off.
Overall, I'm a bit hesitant purchasing in Cook County and would appreciate any insight. Should I run or go with it?