Successful first house hack in Chicago!

14 Replies

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Chicago.

Purchase price: $375,000
Cash invested: $25,000
Sale price: $475,000

We house hacked a three unit in Chicago where we finished the project by adding the appliances and by beautifying the landscaping in the front and back of the property. We self-managed the property. We sold the the property after moving out of the area to Denver.

What made you interested in investing in this type of deal?

Each unit was large enough for us to house hack (3/2) as my husband and I were expecting our first child.

How did you find this deal and how did you negotiate it?

We found it on the MLS. We negotiated with the seller to come down on price d/t us having to finish the project by adding appliances. We were more attractive buyers because we were able to put down 20%.

How did you finance this deal?

Conventional owner occupied loan.

How did you add value to the deal?

Adding the appliances, and updating the landscaping.

What was the outcome?

We sold it for $100K more than what we paid for it. The buyer's appraisal came in under his initial offer to us, which was a bummer for us. We however were able to meet in the middle for the difference.

Lessons learned? Challenges?

It's great to house hack but we should have treated it more like a business. It is a challenge to live with others but so worth it!

Awesome success story and congrats on your SFR that you sold. I sent you a follow and look forward to reading up on your other successes. How did you come across these properties in distress? Was it an agent on BP, someone that you knew?

Thanks! At the time these properties were on the MLS. They were not in really hot neighborhoods so there was not too much competition for them. That being said, they both had multiple offers on them. On the 3 flat, I think our bigger down payment and financing plan helped the seller feel like we were most likely to close vs others who had FHA financing. Market was not nearly as hot as it is now at the time we bought in 2013 and 2014. Hope that helps! Ebe

Also, the agent who helped us buy the SFR was a random agent and not from BP. By the time we bought the 3 flat I held a real estate license in IL strictly to have access to properties and the MLS on our terms. So I was the acting "agent" for the buying and selling of the three flat which also helped in the negotiation of purchase. Ebe

Originally posted by @Filipe Pereira :

Well done! I love the look of these and I bet the bay window area was pretty awesome @Ebe Chinweze. What's next for you guys? 

Thanks! We are now looking for other cash flowing 5-10 unit apartments to purchase. We are living in Denver but looking in the Midwest and southeast for deals. Right now we are exploring the Des Moines and Waterloo Iowa markets to learn how to do this at a distance with lower cost properties if that makes sense. Also keeping an eye out for anything that meets our standards in Colorado. 

Originally posted by @Jonathan Klemm :

@Ebe Chinweze - Congrats on the first house-hack, that's an amazing deal!  What neighborhood is the property located in Chicago?  I love the greystone!

Hi! Thanks the greystone was located in the Bronzeville neighborhood (a neighborhood located north of Hyde Park and south of South Loop). Hope that helps! Ebe

@Ebe Chinweze Congrats! I love the beauty of the house hack, and the rewards really pay off when it comes time to sell! What are you looking for in Denver? The market is tough right now!

Originally posted by @Chris Freeburg :

@Ebe Chinweze Congrats! I love the beauty of the house hack, and the rewards really pay off when it comes time to sell! What are you looking for in Denver? The market is tough right now!

Hi Chris, Thanks! Yes, I am fully appreciating that in this market. Currently, we are looking for cash flowing multifamilies 5-10 units, with at least an 8 cap. Value add would be preferable also. Tough for the Colorado area so we are looking outside the state. Thanks for reaching out. 

 

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