Chicago Investors in North Lawndale Area

4 Replies

I am looking at some properties in the North Lawndale area on the West side of Chicago. Anyone from this forum investing there? This is an area that has undergone some changes in the last two years. I wouldn't mind meeting up for coffee to chat about our investment strategies as well as networking with some investors in the area. The key to developing such areas is to have a strong community presence and a connection with owner-occupied buildings. Anyone out there?

Originally posted by @Ibn Abney :

What exactly do you want to know about the area? 

I am interested in the reality of crime in the area. Yes, I am reading the crime statistics in the area, but is the area really as much of a "war zone" as some investors make it to be? My biggest concerns are 1) finding quality tenants, and 2) keeping my tenants and property safe.

@Albert Plawinski this area (and similar areas nearby) are definitely block by block. I would definitely recommend driving through the area if possible. Relative to other areas in Chicago, definitely higher crime rate. Tenants via section 8 shouldn't be an issue/ are plentiful.

I would consider your capex expenses vs. purchase price. A Lot of folks like the high cash flow/low purchase price in this area, but I find expenses and property management cost outweigh the purchase discount.

good luck!

@Albert Plawinski I own a 3 unit property in the North Lawndale area. I would echo Ibn Abney, the crime varies significantly from block to block.

Making money in the neighborhood primarily comes down to the quality of the property you own and the type of tenants you have. 

The homes are old, approx. 100 years or so. That being said some of the homes have been well maintained. Others have been gut rehabbed by qualified contractors, and others were shoddily put together by investors looking to flip without much concern for the durational quality of the property beyond a short window. Any run of the mill property inspector might not truly take the time to point out all the little flaws in such a property. Being really discretionary at this phase of your search will make a world of difference between capturing those attractive yields or continuously spending your rental income on improvements. 

Secondly, the quality of tenants is huge.  As Ibn Abney mentioned Sec. 8 tenants are plentiful. However there are also non Sec. 8 tenants with decent income in the area that you can rent to. I have rented to both types and I regularly find both types of tenants interested in the area. However screening them properly is critical. Not just the standard background/income/asset check, but an unexpected visit to their current residence will give you first hand exposure to what they live like. 

I agree that owner occupied buildings make a big difference. There are some on the street where my property is, and those owners definitely care about their properties. Their front and backyards are always very well maintained and they don't attract unsavory characters to the neighborhood. 

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