Condo buy & hold investment in Chicago.
Purchase price: $167,500
Cash invested: $33,500
Purchased a condo in desirable Chicago neighborhood in which I lived in for one year prior to moving to Denver. I bought a condo that has excellent staff and maintenance crew that would minimizing my engagement being a long distance investor.
What made you interested in investing in this type of deal?
I was unclear if I would be approved to relocate with work so I strategically sought out a property that fit my living requirements but also rental property goals. I lived in the condo for one year while my request was processed and moved.
I found a property that met my buy and hold strategy. So while I realized very small positive cash flow, I expect it to grow.
While difficult to find a property that met two very different goals, I found a property that met my success criteria.
How did you finance this deal?
20% down and conventional primary owner loaner
@Jon Michael Patterson - Congrats! Sounds like you checked all the boxes you needed to and were able to get your real estate investing started.
What area of Chicago is your condo in? Also, curious as to how you are managing it now.....are you using a property manager or just handling things yourself?
Did you end up buying in Denver when you moved as well?
@Jonathan Klemm Thank you! I bought in East Lakewood (south of addison and east of broadway). I am self managing any issues. I specifically chose a condo that has a property management company and strong maintenance team. I instructed my renter to call them first to help, but if it's big to call me. It's worked great. My maintenance team at the condo is able to handle everything that's come up (including replacing the toilet for me!). It does come at a heavy price in the HOA fee though, but I baked that into my calculations. It takes away cash flow but very easy for me to manage living in a different city.
I've rented in Denver for ~2 years now and plan to buy a property soon that's leans into the house hacking or BRRR strategy. It's difficult to get the numbers to work with properties out here in Denver given the high prices and older homes.
Congratulations @Jon Michael Patterson !
@Jon Michael Patterson - Super smart how you selected your condo based on the HOA and maintenance help they can provide. I've never heard of anyone doing that and it's brilliant. Did you inquiry about that before you closed or how did you even go about figuring that out?
I've heard Denver is tough to house hack. I've heard many people having to rent by the room, which may no be practical for many people.
@Jonathan Klemm yes, I inquired about it before closing. So, I actually read through the 100+ pages of the HOA documents to understand what it included and how it operated so I could maximize off of that vs out of pocket. I would think they are reasonable questions to task your realtor to finding out for you post offer acceptance with the HOA / seller as well. Pretty happy.
Regarding Denver, absolutely. Most stories I hear are renting out individual rooms which doesn't fit my lifestyle. I'm actually looking into the legality of buying single family home in the suburbs, converting it to a duplex, and then building a ADU for me to live in while renting out the duplex. Goal would be for the duplex to pay for the mortgage and potentially cash flow after REFI-ing. And then the ADU be an investment of ~$70,000 for me to live in. This approach definitely requires more cash on hand to invest, but I'm hopeful to recoup it via a REFI and then cash flow with the duplex.
@Jon Michael Patterson , congrats on the new investment property. Coming from a local house hacker (Arvada/Wheat Ridge), being a savvy investor like yourself and partnering up with the investor friendly realtor, you should have no problem finding a SFH House Hack that will give you that sweet spot between privacy and enough income.
On the topic of ADU's, I personally do not feel the juice is worth the squeeze. @Chris Lopez and the Envision Team did an terrific job diving deep into the numbers, planning, design, and permitting ADU's back in2019. Check it out here!
You do not need that ADU to give you your privacy and help offset that pricy mortgage everybody loves. I am right there with you and agree that house hacking by renting by the room is not for everyone, especially with a wife and daughter like myself.
There are SFH's out there that are already set up for what you are looking for with a mother-in-law suite in a walk-up/walk-out basement or even above an existing garage. Depending on the area you choose to invest, operating a is short term rental (airbnb) out of that separate living space is where you will get the most bang for your buck. Be sure to check local rules and regulations first.
Best of Luck!!!!
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