Analysis of deal
Investor · chicago · Member since 2026 · 18 posts · 22 votes
Analysis of deal
Most Popular Reply
Member since 2026 · 97 posts · 57 votes
7moLet me run through the BRRRR math on this one.
All-in estimate with attic: $340k purchase + $180k rehab (high end) + $50k attic = $570k total invested. Your ARV at $625k without parking seems reasonable if comps with parking are going $650-700k.
If you refinance at 75% ARV: $625k x 0.75 = $468k loan. That leaves roughly $100k of your capital still in the deal after refi. For a true BRRRR where you want to recycle most of your cash, that's a lot left behind.
On cash flow with the attic buildout at $5k/mo gross: After PITI on a $468k loan at current rates (call it 7-7.5%), you're probably looking at $3,200-3,400/mo debt service. That leaves $1,600-1,800 before expenses. After vacancy, maintenance, CapEx reserves, and Chicago property taxes which are brutal, you might clear $800-1,000/mo positive. Not bad, but not amazing either.
A few things I'd verify before moving forward: First, get a GC walk-through in addition to the HUD estimate. HUD consultants are great for loan purposes but an investor-focused GC might catch things they missed or have different pricing. Second, confirm the attic conversion is permitted under Chicago zoning. Adding habitable space in Avondale can be tricky depending on your lot coverage and setbacks. Third, double check your rent comps are based on actual leased units, not just asking rents.
If the numbers don't tighten up after deeper diligence, there might be better opportunities out there. But if you can negotiate the purchase price down or the rehab comes in lower than estimated, it could work. What's your situation on financing - are you going 203k or hard money for the initial acquisition?
11 Replies
- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes7moJust for perspective, there is a whole world out there that is profitable. Chicago is big, but it's not the premier choice it once was. Look at how big the opportunity is. Nah, I wouldn't limit myself to Chicago with a bad deal.
Quote from @Isabel Rao:
Hello:
I am under contract for a 2u, 2B1Bath multifamily in Avondale/logan square. Currently it's 340k but needs 160-180k of repair(estimate given by HUD consultant) Will probably need 50k to build out the attic in addition so I can duplex it up. Other buildings in area have sold for 650-700k but I am estimating mine to be 625-650k because it doesn't have a parking spot/garage.
rents likely will be 2k each unit without attic. With attic 3k + 2k. There’s potential for airbnb.Basement is too low to build a liveable space, house sits on the back of the lot so no ADU can be build in front.
Is it a good deal or should I walk away from it? It has been difficult to find deals in the Chicagoland area.
- 7moAaron ZimmermanBusiness MemberAccountant · Chicago, IL · Member since 2018 · 2k+ posts · 1k+ votes
To me that doesn't seem like a bad deal. Are you going to owner occupy or purely investment?
What other pertinent numbers can you share with us?
What are your goals?
Brick House CPAs53 Reviews - 7moVictor SoBusiness MemberReal Estate Agent · Chicago, IL · Member since 2017 · 325 posts · 193 votesWhat’re your plans with this property? Are you househacking it? You mentioned using a HUD consultant. Are you getting a renovation loan on it? If it’s a strict investment property and you’re putting all in for 230-250K cash and getting 5K in rents, it doesn’t seem that appealing to me. However, if you can come out of pocket minimally, still cash flow, gain instant forced appreciation, etc then it could be worth it. The lack of space (ie. No room for basement space, no parking/garage, lack of rooms, etc) is concerning. But ultimately, I think we need to see all the numbers to know. Have you consulted a GC for rehab costs?
Quote from @Isabel Rao:
Hello:
I am under contract for a 2u, 2B1Bath multifamily in Avondale/logan square. Currently it's 340k but needs 160-180k of repair(estimate given by HUD consultant) Will probably need 50k to build out the attic in addition so I can duplex it up. Other buildings in area have sold for 650-700k but I am estimating mine to be 625-650k because it doesn't have a parking spot/garage.
rents likely will be 2k each unit without attic. With attic 3k + 2k. There’s potential for airbnb.Basement is too low to build a liveable space, house sits on the back of the lot so no ADU can be build in front.
Is it a good deal or should I walk away from it? It has been difficult to find deals in the Chicagoland area.
Victor So Real Estate LLC517 Reviews - Member since 2026 · 97 posts · 57 votes7mo
Let me run through the BRRRR math on this one.
All-in estimate with attic: $340k purchase + $180k rehab (high end) + $50k attic = $570k total invested. Your ARV at $625k without parking seems reasonable if comps with parking are going $650-700k.
If you refinance at 75% ARV: $625k x 0.75 = $468k loan. That leaves roughly $100k of your capital still in the deal after refi. For a true BRRRR where you want to recycle most of your cash, that's a lot left behind.
On cash flow with the attic buildout at $5k/mo gross: After PITI on a $468k loan at current rates (call it 7-7.5%), you're probably looking at $3,200-3,400/mo debt service. That leaves $1,600-1,800 before expenses. After vacancy, maintenance, CapEx reserves, and Chicago property taxes which are brutal, you might clear $800-1,000/mo positive. Not bad, but not amazing either.
A few things I'd verify before moving forward: First, get a GC walk-through in addition to the HUD estimate. HUD consultants are great for loan purposes but an investor-focused GC might catch things they missed or have different pricing. Second, confirm the attic conversion is permitted under Chicago zoning. Adding habitable space in Avondale can be tricky depending on your lot coverage and setbacks. Third, double check your rent comps are based on actual leased units, not just asking rents.
If the numbers don't tighten up after deeper diligence, there might be better opportunities out there. But if you can negotiate the purchase price down or the rehab comes in lower than estimated, it could work. What's your situation on financing - are you going 203k or hard money for the initial acquisition?
- 7moEudith VacioPro MemberReal Estate Agent · Chicago & NWI · Member since 2015 · 860 posts · 521 votes
Hey @Isabel Rao 👋🏽
Congratulations on making moves!
If you're rehabbing, you want to make sure that you meet the 75% rule
if you back into the numbers, the purchase price on this deal really should be $260,000 to $290,000
Your Estimated ARV: $625,000 x .75 = $468,000 MINUS renovations $180,000 = $288,000
So yeah, the purchase price on this deal is too high unless you can keep the renovations to $120,000 OR the ARV is higher.
- Investor · chicago · Member since 2026 · 18 posts · 22 votes7mo
hello all, thanks for the advice. I decided to back out of the deal as the seller wasnt willing to lower the price further. I was going through the deal with Reno loan but had to put significant down% due to tight debt to income ratio, I am on a visa so I dont qualify for 203k FHA.
- Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes7mo
Hi There @Isabel Rao - This is super exciting congrats on getting something under contract!
We actually do a large amount of renovation loan construction in Chicago and often hear people wanting to build out attics and duplex down. Both are extremely challenging when using a renovation loan for several reasons.
1. You need plans and a permit to do this type of work
2. You don't typically get plans til after the loan closes
3. By default of 1 and 2, you do NOT know the full scope of the project until the city of Chicago has approved your plans for construction
Also, if you are thinking about AirBnB that is much more difficult than it used to be in the city. Now you technically need to be living in the unit you are renting out and need to have the exact address on your ID and bank statements.
Quality Builders4.966 Reviews - Investor · Hinton, WV · Member since 2026 · 15 posts · 9 votes7mo
At a quick look, the margins feel tight for the level of rehab and risk involved. You're roughly at $340K purchase plus $210K–$230K in renovations, putting you around $550K–$570K all-in before financing, holding costs, permits, and potential overruns which in Chicago can easily add another 10–15%. If your ARV realistically lands between $625K–$650K, that's not a large spread for a heavy project, especially without parking in Logan Square.
The rental numbers are solid at $4K without the attic and stronger at $5K with it, but you'll want to factor in updated property taxes, insurance, and vacancy, and be careful relying on Airbnb given Chicago's STR regulations. If the deal doesn't still work at the low end of ARV with higher rehab costs, the risk may outweigh the reward in this market.
- Specialist · Member since 2026 · 54 posts · 25 votes7mo
At a quick glance, this looks tight unless everything goes right.
You’re in at ~$340k purchase + ~$160–180k rehab + ~$50k attic buildout. That puts you roughly $550–570k all-in before holding costs and surprises. In a project of that size, contingency alone could add another $20–40k.
If your realistic ARV is $625–650k, that’s not a huge margin for a heavy value-add in a market like Chicago where buyer demand can be price-sensitive.
The bigger questions I’d ask:
• Does the deal still make sense if rents come in below projections?
• What happens if rehab runs 10–15% over?
• Are you underwriting this as a flip, long-term hold, or hybrid?
“Hard to find deals” isn’t the same as “this is a good deal.” If the margin only works under optimistic assumptions (ARV, rent, short-term rental upside), that’s usually a fragile setup.
- Real Estate Consultant · Connecticut Ct · Member since 2026 · 130 posts · 30 votes7mo
Isabel thanks for laying out the numbers so clearly. On BRRRR deals like this, the decision usually comes down to the refinance reality, not the ARV.
Most refi lenders will underwrite based on in-place rent at the time of refinance, not projected rents from the attic build-out unless that unit is fully permitted, completed, and leased. That timing risk is what often breaks first-time BRRRRs.
Based on what you shared, I’d stress-test the deal assuming only the $2k per unit rents and see if the refi still works at conservative leverage. If it doesn’t pencil there, the deal is much tighter than it looks on paper.
Do you have a clear timeline for permits, construction, and lease-up on the attic unit before the refinance?
- Real Estate Agent · Chicago · Member since 2021 · 168 posts · 62 votes7mo
Hey Isabel, congrats on getting something under contract in Avondale/Logan, that alone is no small feat right now.
Running quick math, you're all-in around $550–570K after reno. If ARV holds around $625–650K, you're looking at roughly $75–100K in equity before selling costs, not bad, but pretty tight for a full gut plus attic build-out. The bigger question is whether that renovation budget is realistic given today's labor and materials costs. Attic conversions usually get messy (HVAC extensions, insulation, egress, etc.), so make sure you've verified that 50K number.
From a cash-flow perspective, even without the attic, 2x $2K = $4K/month on a $550K basis is decent, especially if you plan to house-hack or hold long-term. With the duplex-up adding another $1K/month, your stabilized rents could land in a strong spot for that neighborhood.
If you’re confident in your contractor’s bid, zoning approval for the duplex-up, and can stomach the risk of the reno surprises, it’s worth leaning in. But if any of those assumptions wobble, your downside could eat that margin fast.
If you want, I’d be happy to walk through your rehab scope, lending structure, and exit plan together, I’m in Chicago and review deals like this regularly. Feel free to DM me and we can pressure-test the numbers tighter.
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