Hi all! My wife and I are considering doing a house hack as our first real estate investment. We both live and work in Chicago and are looking to stay not too far from downtown. I've found some reasonable prices on duplexes in the Wicker Park, Logan Square, Bucktown area that might need a little work done. Seem to be doable w/ FHA and between 3.5-10% down. Does anyone have any experience in these neighborhoods/ideas for better MFH neighborhoods?
Thanks in advance!
@conor m. Those neighborhoods are great. I'm not sure if you have engaged a mortgage lender yet, however, just remember that for an FHA loans to work on a condo the entire building needs to be "FHA approved". Generally speaking most condos in those areas are not already pre-approved with FHA however the buildings can become FHA approved. If you need a connection to a good lender shoot me message.
@Conor M. Hey Conor! These are great areas that have seen 5-10% yearly appreciation in recent years. Recent changes to the HomePossible program are hurting potential house hackers buying power so my precition is these appreciation rates will slow in the next few years. However, that doesnt still mean properties in these areas arent a great investment - especially if you plan to owner occupy and leverage financing.
You will need to consider that the loan limit on a duplex for FHA is $471,000. A lot will depend on your budget and also your income to gauge what your debt/income ratio will allow since you will be eating up half of the rental income while living there.
Id also recommend looking slightly NW in Irving Park, Portage Park, and Avondale areas if you are OK with the distance from city.
I agree with @Jake Fugman. While I love to eat, drink and shop in the neighborhoods you're currently looking at, you're going to end up buying at the top of the market there. Irving Park, Avondale and Albany Park may be slightly better options with more upside potential.
That's quite exciting. I just house hacked a 3flat in east humboldt park/UK Village and have been quite happy with the results. I live in the top unit, rent the middle unit, and AirBnB the first floor. Financing got significantly harder in the last 7 months as @Jake Fugman mentioned the HomePossible program going away, but I have found great luck financing through Huntington Bank in these "low to moderate income tracts" where they can give you back roughly $5,000 at closing, including FHA deals. I just helped my good friends FHA house hack a 2flat in the heart of Logan Square. I work as a broker for @properties out of the Logan Square office and always am a resource if you and your wife have any questions. I hope these past 7 months since you posted this have excited you for the next step.
I'm om the same boat, doing my first house hack in Chicago. We are under contract for a triplex in Avondale (south part of it, close to Logan). I found the numbers are just much better in that area compared to Wicker Park, but I've seen some properties with good potential if rehabbed in Wicker/Bucktown
The trick is that exact "little work" that you mentioned. Most duplex properties we saw actually required a lot of work to make them work for good rents. Go tour the properties, most of them look much better on photos.
Also don't forget to check the property taxes. We toured a duplex in Logan square that had 14k in property taxes and our three-flat in Avondale will be around 13k. It was a deal breaker for the numbers.
Happy to chat more, shoot me a PM.