Is anyone on BP investing in Englewood, Chicago?

Question

I’m looking to purchase rental properties in Englewood, Chicago. And curious to hear from investors already doing so.

Account Closed · Answer

Let me give you some advice from someone who owns over 30 properties in Englewood. I am selling for a good reason. Don’t let the low property prices fool you - this is an area you DO NOT want to put money into. I had a dream that I could help this area improve by rehabbing property and providing affordable housing to people in the area. I don’t want to burst your bubble but you’re in for a world of hurt if you try to do anything here. Unless you’re going to be living in the property you rehab, count on 100000% a breakin every day and night. I’ve had two properties nearly burned to the ground. Electrical wiring stripped, brand new copper pipes stolen, doors smashed in, every single window kicked out. For no apparent reason.

If you rent to tenants, go section 8 100% of the time. But not just any section 8 tenant. You need to THOROUGHLY background check these tenants. Make sure they have a job, make sure they’ve never been evicted. Go visit their current house to see how they live and treat their current place.

If you rent from someone not on section 8, here’s what they’ll do - they’ll pay a security deposit and first months rent, then you’ll never get a dime out of them after that, you’ll spend 3+ months waiting for the sheriff to evict them, rent for those months lost, $646 in legal fees (without a lawyer that is, meaning you have to go to court, most of the time they’ll show up with a laundry list of “things” they’re demanding You fix as the reasons why they won’t pay the rent), and then the worst damage to your property when they finally do leave, you’ll be thousands in the hole after the smoke has cleared. Plus you’ll be paying your water bill and any other bills related to the property during this entire process. Want to know how many evictions I’ve done by myself in 3 years? 33 evictions!

Oh and you better pray if after this evicted tenant moves out that one of the copious amounts of serial squatters in the area don’t break into your property and move in. Because in Englewood, squatters have rights! Meaning, a random person off the street can legally break in, put a new lock on the door, and you’ll have to go through the eviction process to get them out. Yep, out of my 33 evictions, I’ve had to PAY to evict 4 squatters and know right from the judges and police’s mouths - squatters have rights!

If you pick the wrong section 8 tenant, count on them flooding your property, setting it on fire purposefully, or completely destroying it by allowing everyone in the neighborhood to move in, running up your water bill and wreaking havoc on your sanity.

Don’t bother with a management company. You’re not going to get any further than if you were trying to collect rent yourself. The people in this Area do not respect themselves, so how can you expect them to respect you, your property or a management company?

This area is not for the inexperienced, not for the faint of heart, and not for those with low reserves funds. I wouldn’t wish this on anyone unless you’re an experienced investor with a systematic process in place to rehab property and ensure someone you know or are paying LIVES in the property while you rehab, invest in ADT, and screen section 8 tenants thoroughly with monthly check in’s required to inspect your property. I’ve only met one investor in this area who could successfully do this.

Another note — BE CAREFUL which streets you go down. I’ve been shot at, threatened, the works, and some streets are way worse than others. Do yourself a favor and invest in an area you’d feel safe walking around after 1pm — this is when most of the neighborhood wakes up every day in Englewood. Your life, money and sanity are way more important.

Steven Lowe · Answer

I had three break-ins at the last project I did in Englewood.  The first one, they climbed up a power pole and disconnected the power to the building, then up a tree and smashed through a 2nd floor window.  They stripped the service, took a couple of furnaces and hot water heaters.  Oddly enough, they left the copper plumbing untouched.

The second time there was a camera/alarm system with a battery backup.  We saw the video.  These guys were all dressed like Batman...black hoods, black masks, gloves, sunglasses.  They knew where the cameras all were...they managed to mostly avoid getting filmed.  They again took the furnaces and hot water heaters and left the plumbing, probably because the cops showed up shortly after the alarm went off.

The same day, after the cops left, we hired a company to put two of the meanest German Shepherds (and I love dogs!) I've ever seen in the house.  Wouldn't you know it, a few hours later, the dogs caught the same guys coming back for another go round, probably to grab the copper.  The video was kind of comical.  The thieves broke into the basement this time, and one of the dogs did like a Bruce Lee flying leap right at them with its mouth open.  The perps somehow managed to pick up a door slab and use it like a shield.  Got pinned down though, cops showed up, and they were arrested.

No more break-ins after that.  So in conclusion...Dogs rule.

John Casmon · Answer

Engelwood is a tough area for new investors. You should only consider it if you fit one of the following criteria:

1. You grew up or already live in Englewood (or a similar area)

2. You have a trusted AND experienced PM that already successfully manages in Englewood

3. You can protect yourself from a real threat of violence

I'm not judging either way, but it takes a certain personality to invest in Englewood and most investors aren't built for it.

Account Closed · Answer

There’s already a Whole Foods, chipotle etc in the Englewood center on 63rd. Kennedy college is booming. The Englewood police there are also amazing people. I know a few of them and they patrol these bad streets vigilantly. They are literally on every street at all hours. There’s just too much crime and too many gangs of young kids who wreak havoc incessantly.

An experienced investor who is all in with a great team who’s also all in (ie living in the houses being renovated, dogs, cameras, ADT) and a thorough sec 8 screening process can do this successfully, but I don’t feel it’s worth it. And you really can’t miss a beat and need to put a lot of money up to protect your property. All I’m saying is it’s way too much of a headache than it’s worth. And too many bad things WILL go wrong no matter how much you prepare. Youre still going to lose money. That’s just my opinion from years of experience in the area.

Baris Yuksel · Answer

Account Closed

This is a Great story! Thanks for sharing , but I have to ask , for all the trouble you had to go through , how did you end up with so many properties there ? I always laugh when I read a post from some wanna be out of state investor from California asking if they should invest in Englewood . They just don’t have a clue .

Eric Johnson · Answer

Account Closed This was a great post. I'm in Chicago as well, however, I lend on commercial real estate and do investor loans. I see this all the time with people. They underestimate the contextual consequences because it looks good on paper.

Krystal Stowe · Answer

What company did you use to put dogs in the building? I'm thinking of purchasing in that area. I see investors are purchasing in the area and think it may be a good move.

Mike B. · Answer

While I admit that Englewood isn't for the faint of heart, money can still be made in the area. If you have a great PM and budget for the proper security costs, it makes sense. There's a low barrier of entry with tremendous upside, but it will come with it's headaches. If you're a first time investor I would recommend that you get a partner that has experience in the area. The caution in the comments above should definitely be heard but it's not much different than the challenges we faced rehabbing properties in Logan Square, Humboldt Park, Wicker Park, etc...once upon a time. Somebody has to be on the ground floor, you just have to decide if it's for you.

Vincent Incopero · Answer

@Xavier Alicea In addition to all of the information that has already been provided regarding the risks of the area, I suggest you start networking to find a willing and skilled Property Management Company who has deep/extensive roots in the area and who is already managing a significant base of performing doors. In doing so, you might learn more about the area, the attendant risks and the actual ROI of these higher risk doors and more about the headaches associated with ownership. Sometimes you can find a diamond in the rough, however most of the time you will find that the precautions of others are worth following.

Steven Lowe · Answer

I haven't done anything there for about 3 years but my experience was it's a very challenging area to rehab in.  I would be hesitant to attempt another project there.  I had a lot of issues with crime, break ins, violence.  Subs getting threatened, vehicles broken into.  I had a 4 unit building at 59th & Carpenter that I was rehabbing a few years ago where we regularly heard gunshots.

Is anyone on BP investing in Englewood, Chicago?

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