East Garfield (Chicago) Prospects

4 Replies

Hi everyone, I wanted to ask investors what they think of East Garfield in terms of safety, appreciation, tenant quality and overall outlook as a neighborhood to invest in. 

I found a property that cashflows $1,500+ in East Garfield but the safety of the neighborhood concerned me. But this is an EXECLLENT DEAL that I regret passing on, so I wanted to get people's thoughts on what they think of investing there. 

Has anyone invested here for 2-4 unit multi-family buildings? 

@Lakshmi Nikitha Duggirala

East Garfield is a very rough part of town.

Lets take a look at the data

The first chart shows the various income cohorts within East Garfield.

Note the very high frequency of households making under 10k 


Vacancy rates are also very high, at 16.5%. This is double what is considered healthy in a market. 

Lastly we have high levels of poverty at 43% and 48% of households are on SNAPS (food stamps) 

All in all this neighborhood is very tough. Money can be made here, but only if you have experience with D/F grade real estate already.  

@Art Perkitny Thank you for that data! The property I was interested in was rented out to participants of the Chicago Housing Authority (CHA) program. That means the government is paying for a majority of their rent, so it is guaranteed cash flow coming in monthly. There is also a huge waitlist to get into the CHA program so I'd assume participants wouldn't jeopardize getting kicked out of the program by destroying the property either. 

Are there any Chicago investors that have invested in that area or considered it and passed? 

Originally posted by @Lakshmi Nikitha Duggirala :

Hi everyone, I wanted to ask investors what they think of East Garfield in terms of safety, appreciation, tenant quality and overall outlook as a neighborhood to invest in. 

I found a property that cashflows $1,500+ in East Garfield but the safety of the neighborhood concerned me. But this is an EXECLLENT DEAL that I regret passing on, so I wanted to get people's thoughts on what they think of investing there. 

Has anyone invested here for 2-4 unit multi-family buildings? 

East Garfield is interesting as it borders one of the hottest areas in Chicago, The West Loop. It's an area worth monitoring closely for deals if the property is near Western. We've owned property there & have a client that owns 3 or 4 properties there that he rents by the room to University Students. All of the properties are within 1/4 mile of Western. Does stuff happen in the neighborhood, yes. But the buildings are never empty. 

Our criteria for East Garfield: 1. The closer to Western the better. 2. no other vacant building on the block unless we can pick up that building too. 3. If possible provide extra security on the building (Gates, parking garage,...) 4. No one dealing on the corner. How do you figure that out? Ask questions. 5. Naturally- Will the property cash flow. The CHA contracts are good ones if you maintain the property. 6. We don't bet on appreciation in East Garfield but I repeat, the closer you are to Western the better.  

 

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