New Chicago Investor Looking to be a First Time Homeowner

Anthony Pomponi · 2026-02-25T14:48:29-08:00

Hi All,My name is TJ and I have been working and living in Chicago for the past 4 years. After years of renting, my spouse and I have decided we want to make the leap into real estate investing. Our goal is to find a 2-3 unit property with the plan to house hack. I have been searching for the right property with my agent for about a month or two. So far we put in one offer, we were unfortunately (maybe) outbid on. The house seemed to be structurally sound, just needed cosmetic updates for the most part (we planned to have an inspector come out regardless if not) and the numbers seemed to work on paper. My takeaway from that first offer was that I felt very overwhelmed by the unknown after we submitted. I was only able to see the house once and the only documents I received from my lender at the time was my pre-approval letter which did not have much information. The numbers looked right on the template my agent and I have been using but after thinking on it - a lot of the numbers were just estimates. I know this comes with time, but just curious if anyone has advice on how to be as prepared/informed as I can whenever we put in that next offer. Should I be receiving more detailed information from my lender? Anything I might be looking over or past mistakes others have made that I can learn from? Appreciate any help!

Kevin Sobilo

Realtor · Hanover Twp, PA · Member since 2018 · 3k+ posts · 3k+ votes

8mo

@Anthony Pomponi, a few thoughts:

1. This is investing, NOTHING is certain or solid. Even when you apply for a loan your lender will give you an estimate. Some of the items are required to be spot on, but some others will be estimates.

2. Most aspects of real estate investing will deal with estimates or unknowns.

Some examples: You estimate a unit will rent for $1500/month but after 3 months vacant you lower to $1400. You get a bid from a contractor to remodel your bathroom for $8k, but when they gut the walls they find an unknown issue that raises the cost to $10k. You rent to a tenant for $1400 and estimate the average tenant will stay 2 years, but they leave after 1 year.

3. Don't plan for the best case. Many people make the mistake of making their plan contingent upon everything going well aka "going to plan". That is not realistic. At some point things will NOT go to plan and you need to be prepared to cope with it.

4. Learn to manage the unknowns. Identify where the risks are and be prepared to deal with them. Have reserve funds of lines of credit available for when you have a bad tenant situation, unexpected repair, or large cap ex expense.

5. Budget for the long term. You know certain things will happen like the need for maintenance, capital expenses (new roof, hvac etc), and vacancy/turnover. Budget for those things and set monies aside to deal with them. They may not happen at idea times so you may need to dip into reserves if things pop up early on but in the long run if you budget for things you will be ok.

6. Learn to trust your ability to manage things even though many things won't be clear cut and easy like a trip to walmart. When you go to walmart you know what you will buy and what it will cost, when you have an issue with property those things are much less certain.

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Aaron ZimmermanBusiness Member

Accountant · Chicago, IL · Member since 2018 · 2k+ posts · 1k+ votes

8mo

Welcome! There's a lot that's unknown with real estate especially on older Chicago homes.

1. I'd get an understanding of the major systems - HVAC, roof, electrical, plumbing (get a sewer scope). Those will be your big ticket items. After that, I'd be looking at the smaller items too such as appliances.

2. Adjust property taxes and quote out insurance. After mortgage interest, these two are likely going to be your biggest expense so it's crucial that you get those right.

3. As you walk the property, you'll want to see what needs to be fixed and build that in. For instance, if you know a resident has been there 10+ years, you'll likely have a pretty hefty turnover expense.

4. a lot of your early stress is not knowing who to call. To combat that, build a network by being active at real estate investor meetups. I'd listen to the straight up Chicago investor podcast. You never know who you're going to meet plus the likelihood of meeting with other investors will increase your odds of success.

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Jonathan KlemmBusiness Member

Moderator

Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes

8mo

What's up's TJ @Anthony Pomponi! Fantastic to hear that you decided to switch from renting to owning it really is the true path to growing your net worth!

I love the idea of looking for a 2-3 unit Chicago property. I personally think you'll have better luck looking for a 2 unit because if you are thinking about going with a low down payment (FHA or 5% conventional) then you won't have to go up against the self-sufficiency test, which basically requires your rent to cover 75% of your principal, interest, taxes and insurance including the unit you'd stay in.

Just curious how did you connect with your current agent and lender? Jus tasking because your lender and agent should be showering you with information and if they arent maybe you want to find some a bit more geared toward investors/multifamily buyers.

Happy to link you up with some trusted folks!

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Anthony Pomponi
OP
Member since 2021 · 2 posts · 2 votes
8mo
Quote from @Jonathan Klemm:

What's up's TJ @Anthony Pomponi! Fantastic to hear that you decided to switch from renting to owning it really is the true path to growing your net worth!
I love the idea of looking for a 2-3 unit Chicago property. I personally think you'll have better luck looking for a 2 unit because if you are thinking about going with a low down payment (FHA or 5% conventional) then you won't have to go up against the self-sufficiency test, which basically requires your rent to cover 75% of your principal, interest, taxes and insurance including the unit you'd stay in.
Just curious how did you connect with your current agent and lender? Jus tasking because your lender and agent should be showering you with information and if they arent maybe you want to find some a bit more geared toward investors/multifamily buyers.
Happy to link you up with some trusted folks!
Hi Jonathan,

Thank you very much for the response! I may have been a little unclear with my current situation. I have been working very closely with my agent who I've known for many years. He has been helping me with the process every step of the way, providing me all the advice discussed in this thread. Maybe I know more than I thought lol. However, I think it may be on the lender side of things I'm having trouble. I was introduced to the lender through my agent. When first meeting her (the lender), we had an extensive talk about everything that comes with this process. She was very informative. However, I have not spoken directly with her since. Only received emails about my pre-approval for the property I bid on. This is definitely partly due a lack of communication on my part. I think this is where I'm struggling as I don't necessarily know what I should be asking for other than for approval when putting in an offer. Maybe thats just how this process is. I guess I'm curious what else she can/should provide me with before I put in an offer, in terms of financials, in order to make sure I have the most accurate estimate of total cost of this property. Appreciate the help!
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Eudith VacioPro Member

Real Estate Agent · Chicago & NWI · Member since 2015 · 860 posts · 521 votes

8mo

Hey @Anthony Pomponi 👋🏽

Congrats on taking the next step to homeownership / househacking - best method ever to get started in real estate investing! Where in the city are you looking? you're still early in your search and we still have very low inventory (down 20% year over year from last year) but you should definitely have been recieving more info / communication from everyone. Is your agent an investor, too? Your agent should be able to walk you through what might need to be updated but the real test is during the inspection where you get a more detailed report on all of the issues. Also, make sure you get a sewer scope on your inspection, some people miss this part and its REALLY important - it can save you thousands of dollars!!!

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Jonathan KlemmBusiness Member

Moderator

Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes

8mo

@Anthony Pomponi I get working with long time friends - it's fun, but if they arent a rockstar you could be leaving money on the table or missing things that cost you large amounts of money later. Plus, if your agent friend doesnt have a lender that knows what they are doing that's also concerning.

Everyone has their niches and the riches are in the niches so just make sure your team is in your niche.

I highly suggest connecting with some top notch Chicago lenders who are neck deep in this multi-family space.

Try connecting with @Joshua Jones @Zack Karp, @Jose Valdovinos, or @Landon Hoon

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Paul De Luca

Real Estate Agent · Chicago, IL · Member since 2018 · 1k+ posts · 1k+ votes

8mo

@Anthony Pomponi

What kind of detailed information are you looking for? If you have a specific question related to the cash to close, closing costs, etc you should ask your lender.

As for underwriting, the best you can do is estimate your income and expenses as accurately as possible. It's useful to get actual expenses from the listing agent such as insurance, utilities, and any recent improvements the seller made. You should estimate pro forma rents based on rental comps (properties similar to your property that recently rented in the area). Make sure you are accounting for everything including but not limited to taxes, insurance, repairs & maintenance, utilities, and capital expenditures.

Be conservative with your numbers and build that into your offer. Don't make the most optimistic projections your target.

To @Jonathan Klemm's point, your agent, lender, home inspector, attorney, etc should be educators and advisors to answer any questions you have. They are a wealth of information available at your fingertips.

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Zack KarpPro Member

Lender · Schaumburg, IL · Member since 2015 · 834 posts · 774 votes

8mo

@Jonathan Klemm thanks for the tag!

@Anthony Pomponi as mentioned your loan officer should be providing you with complete clarity, transparency, and be your partner in this journey. If you find a property, they should be providing you an estimate of your monthly payment and cash to close. Some are more diligent than others (like me), and take the extra steps to look up the property, the tax bill, the zoning, etc and point out any red flags, get you accurate numbers, offer up advice and strategy that you or your realtor aren't thinking about, and looking ahead to set you up for future success for the exit and qualifying for next properties. If your LO isn't doing that for you, then perhaps find someone else. You are certainly not committed to using the lender your realtor referred you to. Happy to connect if you need another option.

Best of luck!

847-387-5513

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Jose Valdovinos

Lender · Greater Chicagoland Area · Member since 2024 · 8 posts · 9 votes

8mo

Appreciate the mention, @Jonathan Klemm!

@Anthony Pomponi — your instincts are right. Pre-approval is just step one. Before submitting offers on multifamily, you should have clarity on:

• Exact cash to close (down payment + closing costs + reserves)

• Payment sensitivity at different rate scenarios

• How rental income is being calculated for qualification

• Underwriting reserve requirements

• Timeline expectations from contract to closing

A solid lender in this space should be stress-testing your numbers before you write the offer — not after you’re under contract.

If helpful, I’m happy to walk through what that looks like on a quick call so you feel fully dialed in before the next bid.

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Jarret Jarvis

Real Estate Agent · Chicago · Member since 2021 · 178 posts · 64 votes

7mo

TJ, congrats on getting to the offer stage, that already puts you ahead of most people who just browse listings and never write. Feeling overwhelmed after that first offer is completely normal.

A few things that will help on the next one:

From your lender, you should have more than a pre‑approval letter. Ask for a full breakdown at a realistic price point: rate, closing costs, taxes, insurance, PMI (if any), and a clear "all‑in" monthly payment and cash‑to‑close so you're not guessing.
On your analysis, try to replace as many guesses as possible with real numbers: market rents for each unit, realistic taxes and insurance, and a line item for repairs/CapEx instead of assuming "it's just cosmetic."
Before you offer, set written rules: your max price, minimum acceptable cash flow or out‑of‑pocket to live there, and what inspection findings are automatic walk‑aways. That way you’re following a plan instead of emotions when things get real.

If you’d like, I’m happy to send over a simple Chicago‑specific 2–3 unit house hack calculator and a short list of questions to email your lender before your next offer, just say the word and I’ll share them so you go into deal #2 a lot calmer and more confident.

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