New real estate investor looking in Chicagoland

21 Replies

Hi I am a new real estate investor in West Des Moines, just bought my first buy and hold house. Going with the BRRRR strategy. Looking to relocate to Chicagoland area. Trying to house hack in a multi family fixer upper in a decent and safe neighborhood. No specific location is necessary. Trying to BRRRR but a normal buy and hold would work too. Any neighborhoods or any other advice for the Chicagoland would be extremely helpful. Thanks.
@Zach Schnoebelen - hey Zach, local to DSM now but spent most of my life in the Chicagoland. Northwest Indiana market is a solid place to check out, esp for what you're after. If you locate right you will be within your range for Chicago (depending on where your destination is). Check your property tax basis on all investments there... some counties are not investor friendly, owner occupied gets a massive break unlike Polk/Dallas in Iowa. I've got some references back that way including contractors and realtors if you need a connect. Lemme know! @Terry Mclain - thanks for mentioning me!

@Zach Schnoebelen - a hour from downtown is dependent on your means on transport.  8 miles from the loop is about 45 min in rush hour on the train or by car.  On the north side you can expect a $600k price range 

Originally posted by @Zach Schnoebelen :
@Brie Schmidt thank you price ranges are helpful. Looking for lower price range and willing to have a longer transportation.

 What kind of price range?

@Zach Schnoebelen

Since you mention train ride, I think of the South Shore Line which runs from the Loop all the way to South Bend IN. Last I visited 4-5 years ago South Bend it seemed like a nice enough town. The train goes through Gary, not so nice, and quite a bit of the lake front is heavy industry around there. A lot of the hoods it rolls through looked rather run down, on that trip. A long time ago I lived in Dolton. Wish I could say something  good about Dolton. As the old song says, The south side of Chicago is the baddest part of town. Some things never change. Link to train, hope it helps.

https://www.mysouthshoreline.com/

Hi @Zach Schnoebelen ! I'm with @Mitch Coluzzi about checking out Northwest Indiana. I'm based in Griffith, IN - just 45 minutes from the heart of downtown Chicago. Taxes are low, communities/schools are good, multiple types of transportation to the City, and many people who work in Chicago live here.

Best neighborhoods for your price range: Highland, Munster, Griffith, Schererville, Crown Point (a bit further from transportation), Dyer, St. John. Stay away from Hammond, Whiting, Merrillville or Gary - unless you want to be in a B- or C/D-class property.

If you ever have questions about the area or need some boots on the ground in NWI, I'm happy to help or connect you with some great people who can!

@Mindi Rosser @Zach Schnoebelen  

Mindi is spot on.  

We had several holdings in Griffith back in the day, solid rent basis with a good pool of tenants.  We sold our 4plexes (2/1s) for $250k/ea back in 2015 era, our SFDs were anywhere from $110-$165k.

We also played in Hammond a bit but... be very careful on location, tax basis, and I would caution you about rental inspections.  In my experience the inspectors were fairly "petty" when it came time for the Section 8 annual inspection / rental increases.  We missed several increases over missing lightbulb(s), broken screen(s), or a tenant decision to removed copper overflows on water heater (scrap value)...  missed one over a smoke detector that tenant had taken down and set on side-table... it was literally within eye-shot...

Originally posted by @Zach Schnoebelen :
@Brie Schmidt what are the price ranges I’m looking at for a safe neighborhood 1-1.5 hour train ride to downtown Chicago.

 For a 2-4 unit?  $300k - $500k

Best neighborhoods for your price range: Highland, Munster, Griffith, Schererville, Crown Point (a bit further from transportation), Dyer, St. John. Stay away from Hammond, Whiting, Merrillville or Gary - unless you want to be in a B- or C/D-class property.

Your rating of these towns is off. Part of the issue is the size of the towns equates to areas that differ all over the place. Hammond ranges from C- to B+ (Griffith is a B). Merrillville is C to A. Gary is F to C+. Your best ROI will be in Hammond and Merrillville because you can grab a solid property under $130K and get great rents.

Hi @Zach Schnoebelen , welcome to Chicago :) My suggestion is Berwyn - it's a suburb on the near southwest side that is still serviced by our commuter train, the Metra, which can take you downtown in <30 minutes. The village has done a lot to improve itself and attract new businesses and development over the past few years, which is translating nicely into property value appreciation. Current 3-4 units on market are ranging from $210,000 - $425,000, making it an affordable option to stay a little closer to the city. Jefferson Park and its surrounding areas on the far northwest side might also be an option, but prices there have increased significantly over the past few years. 

Chicago Magazine article on Berwyn: http://www.chicagomag.com/Chicago-Magazine/May-2018/Berwyn/

@Zach Schnoebelen like @Gloria Wiekert said a lot of the near western suburbs are great. I am actively investing in Berwyn, although you have to watch your taxes very, very closely. As you compare the city to the suburbs, keep in mind that taxes are higher in the near west suburbs, so the lower purchase prices can be deceiving. For the most part, it won't make sense to spend anything over 300k in this area, and deals are a little tougher to find right now.