I am fairly new to real estate and am looking to break into the Chicago market. I am a CPA and work with numbers for a living. I have one question for you. My goal is to buy a 2 BR condo and rent one of the rooms out. As an owner occupant I am pretty certain this would be ok with most condo associations. My question is this, I came across this 2 br condo foreclosure which I fell is dirt cheap for the area as the rent is fairly high. Can someone glance over this and explain to me how this could potentially be a bad deal?
Based on the Zillow my mortgage payment would only be $491 mo (with a 20% down payment) where I know for a fact I could rent the room out for approximately $700-$800 once it's in decent condition. Any feedback would be appreciated.
For what it's worth, you may want to refrain from posting exact links to the property on the site until you have a "option to purchase" agreement signed. It's best to just give the numbers and fill in the blanks as needed. In general, 99% of the people on here will be glad to help you with your analysis, but there will always be the 1% looking to "steal the deal" from you (assuming it really is a deal). Just my 2 cents...
Thanks for the advice Jonathan. I am not necessarily looking to buy the property just wanted some insight on how to analyze such a deal.
That is an excellent way to get started. In 1988 I bought my 1st house & got a roommate. Then I sold it 2 years later and bought a house and a 5 unit apartment building.
Best of luck to you.
On my phone and haven't even opened the link but I am going to say based on the address that the monthly assessments are ridiculously high. The condo is likely pretty outdated as well and there is a good chance the building is going to have special assessments.
I checked the link and it does not appear to be an active listing
So a few comments:
1. Agree with @Matt Galas that the assessments could be high like $800+ per month
2. Allowing roommates you need to check the bylaws...
What's your goal? Are you set on a specific location? I see your in Homer Glen if you need any help on the N side let me know. I'm a broker and live on the NW side
@Don Bradley - I was able to find an old listing. It had the assessment at $647 a month which includes Gas, Includes Common Insurance, Includes Doorman, Includes TV/Cable, Includes Exterior Maintenance, Includes Lawn Care, Includes Scavenger, Includes Snow Removal
So, if you get it at auction at that price your expenses would be
$1280 monthly payment
I know the area well, I used to live at 3420 N LSD - for an 11x10 bedroom I would expect you to get $700 ish for rent.
Also, with condos you have a limited exit strategy. Make sure you read the bylaws and see if you can rent it out if you ever want to leave. I know SO many people who cannot get out of their condos because the market here is so saturated with them
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