Chicago and Suburbs for Rent2Own

3 Replies

Greetings!

Please, pardon my broken English, it is not my first language :\

After a month of just collecting all the information, I could find, I decided to start investing in Real Estate. I live in North Suburbs of Chicago, and in my area and some areas around there is a pretty solid amount people are paying for rent, so I thought it would be a good idea not to start with a city, but look for something close to where I live. 

Now, as I mentioned, this would be my first investment property and I don't want to just jump straight into the pit. Instead, I want to find a single-family building with a little or no work needed and put in on market with Rent-to-own strategy so I can avoid major tenants drama until I create a good infrastructure for it (I mean the good processes of collecting rent, looking for tenants, evicting tenants when I need to, finding the best team I can trust, etc.). I basically have several questions for you folks:

  1. Is this a good strategy for the first investment? Or should I go with regular rent instead? (I understand that BRRRR or flips are not really for the beginners)
  2. Is it really easier to find tenants for rent-to-own than regular tenants?
  3. How aggressive do you think my strategy should be? I don't want to go full-predatory sucking all the money from a people. But at the same time, all this is just so I maximize my profit and I want to use all the perks this strategy gives you - NROP as high as possible, higher long-term cash flow, almost hassle-free landlording, etc.
  4. My main goal is short-term high cash flow, not the equity. But with that being said - would you rather go in white collar areas with a higher risk of tenants losing their high income or should it be a blue-collar area where jobs are more stable, but cash flow is lower?

With all that being said, in the beginning, I would rather hold the first building for at least 4 years and if those years are being profitable - I would love to keep the building longer. And If my statistics don't lie to me - people usually do not purchase the house after all simply because of people's habits rarely change, especially in a good way.

Please, criticize my view of this topic as much as you possibly can if you personally dealt with leasing your properties. Share your experience. Any tips or bits of advice can make a huge difference! 

And also, let's network! I would love to meet new people, especially local ones!

Thank you!

@Ian Dikhtiar  I  can connect you one of local investor in you area who is new but has done some deals already.

I think it'll be pretty hard to find a single family home that has an acceptable cashflow.  And there's tons of good quality tenants out there.  In my experience most of the rent-to-own tenant buyers have poor credit.  

I'd rather rent a property to someone that's highly qualified than gamble on someone with poor credit performance.

Scot, yeah, that makes sense! But at the same time, there should be people who have a nice stable job, but low credit. 

Anyway, I already changed my mind on this idea because if I sign that kind of lease - I won't be able to use that HELOC as a downpayment for my next properties. So I'm considering some other ideas now. Thanks for responding, tho!

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