Updated over 6 years ago on . Most recent reply
Chicago Real Estate Market
What would be considered a good deal for Chicago? I've been examining areas such as Avondale, Irving Park, Humboldt Park, Bridgeport, and Mckinley Park, and from what i've researched people claim that these are up and coming areas where a good deal can be had. From what i've seen on websites such as Zillow, even remedial properties are going for $330k +. If you look at what they sold for several years ago, they were dirt cheap, which leads me to think we are in a bubble. Long story short, what would be considered a good/decent deal as far as a house?
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What you consider a good deal is different from one person to the next. You don't give the parameters you are looking for. You sound like you are looking for cheap. Cheap is not necessarily a good deal and expensive is not necessarily a bad deal.
In those neighborhoods you will not find what the rest of the country might consider a good deal. 2% rule, etc for a rental 70% of ARV for a flip for example. Competition in this area is too great. But again, I don't know what you think is a good deal.
Many people buy decent to even marginal deals in hopes that appreciation turns them into good deals. Most larger investors are only looking for mid single digit returns. I would actually say this is most of the transactions here in this market. So that is much of what you will see. You need to dig deeper than Zillow for a deal.
You can argue whether we are in a bubble or even what a bubble is....there are some segments and neighborhoods of the Chicago market which are really hurting and down over the past 18 months and showing very bad signs that not many people are talking about. That may be a sign of things to come or might not. It is not all segments and not all neighborhoods.
it is certain you are looking for properties in areas that are not up and coming but have already come up a whole lot. I live in Avondale now. It was up and coming 3-4 years ago. There are still parts of it that are not great....but my guess is those parts will stay not great. But the screaming buys are long gone. What is left might turn out to be good buys or might be crap buys...only time will tell.
You are looking for property after a years long streak of appreciation and buyer demand. So no, you are not going to find screaming deals.
To get screaming deals, you have to buy when no one else wants to buy. Adjust your expectations, adjust your target neighborhoods, or wait and hope for a decline.