New investor in Chicago

17 Replies | Chicago, Illinois

I am a new investor in Chicago looking network with other investors, learn about the potential return on investment, and learn about C+ neighborhoods which are suitable for investment.

Welcome to BP!  I'm a developer, general contractor and investor in the Chicago Area.  Feel free to connect.  

@Einat Menashe Welcome!  It really depends on if you are looking to buy/hold or try and flip.  There are still some C class (more often D class neighborhoods) in Chicago where you can find the "1% rule" applies, but typically they are a good distance from city center and you may have to deal with similar class tenants. Anything C+ and above you will find that its very hard to hit the 1% rule unless you do a decent size rehab. 

If you are open to SFH in the suburbs Id recommend looking about 25 miles SW or South where you can secure homes for around $100,000 that will rent for $1300-1400/mo. Just watch out for the taxes which are typically higher VS Chicago.


@Jake Fugman thank you for your reply. I am looking for rentals and I am looking to use the BRRR strategy. I am hoping to hit the1% or higher so I surprise to hear that it is hard to do, but thank you for your honesty. Do you own any rentals in Chicago?

@Einat Menashe   If you are willing/able to do medium to large rehabs to the unit(s) it will be possible to hit the 1% rule but there wont be anything turn key in area that have seen 5-10% appreciation in recent years (near west and NW sides).  The west side and near south sides of the city are the areas to look for the 10%+ cap rates but you wont find that they have good potential for appreciation. 

@Einat Menashe  So You want to buy in the Chicago Metro area. Have you looked for/found an investor friendly realtor? Since you are out of state, have you visited any of the city/suburban areas that you want to invest?  Do you have any idea the price range or type of properties you want to buy?

@Einat Menashe you can most definitely find properties that are over the 1% rule in the southwest suburbs. I routinely sell properties in Berwyn, Cicero and Forest Park that hit anywhere from 1.2-1.5%. Not everything on the MLS works these days, but there are still deals to be had.

The main thing you will probably want to figure out is who will be your manager. Management is probably even more important than the deal in some ways. A bad manager can make a great deal lousy in a hurry (ask me how I know!). 

@Einat Menashe

Not trying to be discouraging but there are approx 75 official neighborhoods (and hundreds of sub neighborhoods) inside the city limits, plus at least five counties in the Metropolitan area. In the city, one block could be different from the next with pricing, architecture, SFH/MFR inventory etc.

C+ area in Chicago May mean something different to your eyes than Seattle. You may need to try and narrow your neighborhood focus to get some positive traction on your goal.

You mentioned multi family BRRR. Are you trying to rehab multi family and generate higher Cashflow, or are you trying to generate appreciation? Having that answered may help determine where you can invest.

Good Luck with whatever you choose.

Originally posted by @Einat Menashe :

I am a new investor in Chicago looking network with other investors, learn about the potential return on investment, and learn about C+ neighborhoods which are suitable for investment.

Welcome to BP.  So how are you defining C+ neighborhoods?