Newbie moving to Chicago, IL or Dallas, TX

8 Replies

Hi Everyone,

I am graduating from business school next year and want to start planning and acting of my future financial freedom. 

For my future job, I can choose between Chicago, IL or Dallas, TX as my base. 

From my previous learnings, my initial strategy is to invest in a duplex and "house hack" while gaining more experience to invest in additional properties. 

I would love to get some advice on which location is best to invest.

Thank You!

Fabricio Kannenberg

@Fabricio Kannenberg congrats on graduating! Did you go to Ithaca?? My wife graduated from there, and that is a beautiful area to live for sure. If you decide to come out to Chicago, let me know. Chicago has a lot to offer in terms of housing supply and quality of life. There are definitely a lot of good locations that you could be successful house hacking in. A lot of the location question comes down to your goals though as many folks are taking pretty slim cash flow so they can live in desirable areas. I personally am still seeing solid deals in the suburbs where I work where investors can make 10-12% COC or better with some nice appreciation upside.

Originally posted by @Fabricio Kannenberg :

Hi Everyone,

I am graduating from business school next year and want to start planning and acting of my future financial freedom. 

For my future job, I can choose between Chicago, IL or Dallas, TX as my base. 

From my previous learnings, my initial strategy is to invest in a duplex and "house hack" while gaining more experience to invest in additional properties. 

I would love to get some advice on which location is best to invest.

Thank You!

Fabricio Kannenberg

 Hey Fabricio.  I am an investor here in Chicago and originally from Central New York.  Ithaca is gorges!  Chicago is a great place to invest(though, I think Dallas is as well).  Chicago has an outstanding housing stock that consists of duplexes, triplexes, and quads(or two flats, three flats, and four flats as we call them here).  It is also a great mix of cash flow and appreciation.  Let me know if there are any Chicago specific investment questions that you have.  

@Fabricio Kannenberg Welcome! I'm an investor in Dallas and I, myself, invested first and foremost into a duplex and house-hacked it and went from there. It's been a tremendous opportunity for me - and allowed me to catapult myself into investing further. DFW is definitely a great market but it's also very competitive. Deals definitely come around - but when they do you have to be quick to jump on it.

Originally posted by @Fabricio Kannenberg :

Hi Everyone,

I am graduating from business school next year and want to start planning and acting of my future financial freedom. 

For my future job, I can choose between Chicago, IL or Dallas, TX as my base. 

From my previous learnings, my initial strategy is to invest in a duplex and "house hack" while gaining more experience to invest in additional properties. 

I would love to get some advice on which location is best to invest.

Thank You!

Fabricio Kannenberg

I am a believer that you pick where you want to live and then figure out how to play the real estate market where you live.  IMO there are always deals to be found in any market.  They are just a little more difficult to find in markets that have made a big run.

Having said that, I grew up in Illinois and have lived in both Chicago and Dallas.  IMO Chicago and the state of Illinois have major major, issues financially.  The bonds suggest that they will go bankrupt, and the politics are not friendly to landlords or businesses in general.

If I moved to Chicago, I would invest in NW Indiana, I think Dallas has a much broader choices to invest over the long term, even if I think that the Dallas market is showing some signs of slowing.

All great answers.

I wonder what exactly is the impact to a landlord when you say:

"The bonds suggest that they will go bankrupt, and the politics are not friendly to landlords or businesses in general."

Would you mind clarifying?

Thanks

Originally posted by @Fabricio Kannenberg :

All great answers.

I wonder what exactly is the impact to a landlord when you say:

"The bonds suggest that they will go bankrupt, and the politics are not friendly to landlords or businesses in general."

Would you mind clarifying?

Thanks

 1) the city of Chicago has terrible rules against landlords, as an example Doing this from memory, but I think landlords are required to pay interest on an annual basis to their tenants.  If they dont, or if it comes from a co-mingled account the tenant is able to get significant damages.  Even if the tenant gets their full reimbursement.  My understand is many Chicago landlords no longer take damage deposits for renters.  Never mind difficulties with collections or evictions which I understand are incredibly onerous.

2) more to the point, about the state and city bonds, the city needs to find money to pay their debts.  They already have high fees and property taxes, and there has been a fairly large exodus of population and businesses.   And services have been cut to the bone.

At some point we likely see bankruptcy (as predicted by the bonds), but even if we dont, its fair to say Illinois is not a growth state, and that costs for fees, and property taxes are likely headed up.

So declining population, radical tenant friendly laws and high government costs all point to me as a place I would not want to invest.

Hello! @Fabricio Kannenberg

Welcome to BP, and congratulations on making the decision to invest in your future via real estate.

I have written a few blog posts that may help you get started here on BP, and with your investing. Please click on the links, give them a read, and share your thoughts in the comments.

First is a post that I feel will help not get overwhelmed with the amount of info that is here on BP:

https://www.biggerpockets.com/blogs/5868/52761-the-simple-guide-to-getting-started-on-bp

The second is a post that will help get you focused with your real estate investing goals:

https://www.biggerpockets.com/blogs/5868/52743-im-new-to-bp-any-advice-would-be-appriciated

The last one is a post that will help you choose an “investor friendly” real estate agent.

There are many agents out there, but it’s important to choose the right one.

https://www.biggerpockets.com/blogs/5868/52724-im-new-to-investing-how-do-i-find-an-investor-friendly-agent

I love answering questions if you have any! Good Luck :)

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