Newbie Here!!! To Chicago and Real Estate

Member since 2019 · 6 posts · 3 votes

Hello Everyone! I’m a newbie here on BP (podcast listener just never took the step to engage on here). I’m from NYC (family is still there) and recently moved to Chicago for work. I’m in one of those rotation programs that move you around every 6 mos-1 year.( This is one of the biggest reasons why I have felt like I could not start my RE investing — where would I even buy?). I’m interested in the Chicago area and the NJ-PA-MA (as I will most likely be returning to NYC they are easy commutes).

I stalked a couple of posts on here already and I’m super impressed with the energy and learning that is happening. Can’t wait to join the BP family and learn some great things!

2 Reply

13 views

Most Popular Reply

Audrey Parzyk

Realtor · Chicago · Member since 2019 · 29 posts · 11 votes

Welcome @Rhoda Agyepong! Have you considered buying duplexes each time you have to make a move for work? Then living in one and having the tenant in the other cover most, if not all of your mortgage. Feel free to reach out if you have any questions.

2 Reply

See this reply in the discussion

22 Replies

Jump to latestLatest

Sort by

Brian Ploszay
Investor · Chicago, IL · Member since 2009 · 1k+ posts · 1k+ votes
7y
Real estate here is much cheaper than NYC.
2 Reply
Haseeb M.
Real Estate Agent · Hoffman Estates, IL · Member since 2017 · 90 posts · 68 votes
7y
@Rhoda Agyepong
Welcome to the party! :)
Make short term / long term goals and work on them each day, It is easier to execute.
Questions? BP is a great place to ask and network.
1 Reply
Rhoda Agyepong
OP
Member since 2019 · 6 posts · 3 votes
7y
@Haseeb M. Thanks! I’m glad to be here. My short term goal is to buy my first cash flow property by the end of the year.
1 Reply
Andrew SyriosPro Member
Moderator
Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
7y
Welcome to BiggerPockets Rhoda and good luck investing!
Podcast Guest on Show #121
0 Reply
Haseeb M.
Real Estate Agent · Hoffman Estates, IL · Member since 2017 · 90 posts · 68 votes
7y
@Rhoda Agyepong
Chicago market is very diverse. You can cashflow very good in some places while others you can barely make it. I invest in apartment buildings (6-24 unit) in the NW suburbs where the 1% rule still applies.
You will need 25% down payment (some banks wil do 20% if the deal is very good). Consider the smaller community banks, the big boy bank terms can be insane.
1 Reply
Alex Manwell
Rental Property Investor · Detroit, MI · Member since 2014 · 15 posts · 18 votes
7y
@Rhoda Agyepong welcome to the Great Lakes!! Just in time for summer :)
Buying a multi-family (3-4 unit) in Chicago to occupy as your personal residence while you’re here would be the “house hackers” way to get started. You can do this with a 5% down payment conventional mortgage.
Where in the region do you commute for work?
2 Reply
Audrey Parzyk
Realtor · Chicago · Member since 2019 · 29 posts · 11 votes
7y
Welcome @Rhoda Agyepong! Have you considered buying duplexes each time you have to make a move for work? Then living in one and having the tenant in the other cover most, if not all of your mortgage. Feel free to reach out if you have any questions.
2 Reply
Rhoda Agyepong
OP
Member since 2019 · 6 posts · 3 votes
7y
@Alex Manwell I live in the south loop rn and commute 15 minutes downtown (uptown here) for work. I remember reading that I had to live in the property for atleast a year for the FHA loan. Should I rotate out of Chicago before that year is fully up, are there any legal implications? Does my interest rate increase?
0 Reply
Alex Manwell
Rental Property Investor · Detroit, MI · Member since 2014 · 15 posts · 18 votes
7y
@Rhoda Agyepong that is indeed the case with FHA. At the closing you sign a HUD form indicating your intent to occupy the property as your primary residence for one year... so buying with an FHA might not be the best option for you.
However if are ready to do *something*, consider purchasing a condo with a 5% conventional mortgage, and keep it as a rental when you move out of town. You'd be in good company: South loop is a very active rental market, and lots of out-of-state investors park their capital South Loop property.
Key here is running the numbers and making sure your prospective property will cash-flow upon moving back east. That is to say: rent covers the expenses, including your mortgage payment.
The kicker with Chicago buildings is HOA/association fees. They will make or break your cash flow. Important to find buildings with good reserves, that are friendly to rentals, and have reasonable monthly HOA fees.
Happy to talk more! Feel free to shoot me a message with any questions. My brokerage's office is at 18th and Michigan, so South Loop is a market I follow closely :)
1 Reply
Brie SchmidtBusiness Member
Moderator
Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
7y
@Alex Manwell - both FHA and 5% down have the same owner occupancy requirement of 1 year - why would you recommend the 5% if it is illegal to do FHA?
Podcast Guest on Show #132
Second City Real Estate4.821 Reviews
Website View Page
0 Reply
Alex Manwell
Rental Property Investor · Detroit, MI · Member since 2014 · 15 posts · 18 votes
7y
@Brie Schmidt 5% conventional would have the same 1-year expectation?
0 Reply
Alex Manwell
Rental Property Investor · Detroit, MI · Member since 2014 · 15 posts · 18 votes
7y
@Brie Schmidt that answer was a quick google search away... so basically anything anything under 20% will require that. My mistake @Rhoda Agyepong!
Perhaps best to wait until you’re back in nyc, or put 20% down.
2 Reply
Rhoda Agyepong
OP
Member since 2019 · 6 posts · 3 votes
7y
@Alex Manwell and @Brie Schmidt thanks for the info. I will work on saving the full 20% + cc while I continue to learn as much as I can about investing strategies and the markets I’m interested in.
0 Reply
Brie SchmidtBusiness Member
Moderator
Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
7y
Originally posted by @Rhoda Agyepong:
@Alex Manwell and @Brie Schmidt thanks for the info. I will work on saving the full 20% + cc while I continue to learn as much as I can about investing strategies and the markets I’m interested in.
Personally, I think condo investing is a bad idea. I actually will refuse to take on a client looking to do it because I am so morally against it because you have zero control with a HOA.
I would consider 2-4 units, especially in Chicago. But you would need 25% down
Podcast Guest on Show #132
Second City Real Estate4.821 Reviews
Website View Page
2 Reply
Jonathan KlemmBusiness Member
Moderator
Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes
7y
@Rhoda Agyepong - I second @Brie Schmidt comment about condo investing. HOA fees will eat right into your cash flow, you have no control of the HOA, and have no control on how well other people will want to maintain your building.
Go look for a 2-4 unit. Best of luck!
[email protected]
Quality Builders4.966 Reviews
Website View Page
0 Reply
Haseeb M.
Real Estate Agent · Hoffman Estates, IL · Member since 2017 · 90 posts · 68 votes
7y
@Brie Schmidt
I completely agree. HOA dues have been ratcheting up and you would have no way of controlling them.
0 Reply
Audrey Parzyk
Realtor · Chicago · Member since 2019 · 29 posts · 11 votes
7y
Originally posted by @Alex Manwell:

@Rhoda Agyepong that is indeed the case with FHA. At the closing you sign a HUD form indicating your intent to occupy the property as your primary residence for one year... so buying with an FHA might not be the best option for you.
However if are ready to do *something*, consider purchasing a condo with a 5% conventional mortgage, and keep it as a rental when you move out of town. You'd be in good company: South loop is a very active rental market, and lots of out-of-state investors park their capital South Loop property.
Key here is running the numbers and making sure your prospective property will cash-flow upon moving back east. That is to say: rent covers the expenses, including your mortgage payment.
The kicker with Chicago buildings is HOA/association fees. They will make or break your cash flow. Important to find buildings with good reserves, that are friendly to rentals, and have reasonable monthly HOA fees.
Happy to talk more! Feel free to shoot me a message with any questions. My brokerage's office is at 18th and Michigan, so South Loop is a market I follow closely :)
You may need to talk to a lender for clarification, but I believe if you have a FHA loan and sign the form with your INTENT to stay for a year and then get moved for work, you will not be penalized. There are certain circumstances that they understand like getting married or having a child and needing to move.
0 Reply
Dmitriy Fomichenko
Solo 401k Expert · Anaheim Hills, CA · Member since 2012 · 18k+ posts · 6k+ votes
7y
@Rhoda Agyepong
Welcome to the BP family! Good to have you here! Here are some recommendations for you:
Find and connect with other BP members that are in your area: https://www.biggerpockets.com/search/users
Set up keyword alerts to be notified of the topics that interest you: http://www.biggerpockets.com/alerts
Read Beginner’s Guide: http://www.biggerpockets.com/real-estate-investing
Check out BP Podcasts: https://www.biggerpockets.com/podcast

Wishing you the best!
0 Reply
Michael Facchini
Lender · Chicago, IL · Member since 2017 · 438 posts · 193 votes
7y
Possible to do 15% down on 2-4unit investments with certain lenders.
0 Reply
Bob Floss II
Attorney · Northbrook, IL · Member since 2017 · 719 posts · 549 votes
7y
House hack and buy a 2-4 unit building
0 Reply
Brie SchmidtBusiness Member
Moderator
Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
7y
@Audrey Parzyk - getting married is not an exemption from the owner occupied certification. Having a job transfer is but if you know about it before the closing that could get you in trouble
Podcast Guest on Show #132
Second City Real Estate4.821 Reviews
Website View Page
0 Reply
Andrew SyriosPro Member
Moderator
Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
7y
Welcome to BiggerPockets Rhoda and best of luck investing!
Podcast Guest on Show #121
0 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.