I'm a new investor looking into the market in Elgin, Illinois. I'm 21 and have a full time job, so I don't have a lot of savings, but could have $10k for a down payment.
Found a property looking very promising for a buy and hold with a lot of fixing up. It's listed for $95k and going to need 200-250k of renovations (pretty much down to studs), for 2 1200sq/ft commercial units, and 4 residential units (800sq/ft, 1100sq/ft, 1200sq/ft, 1400sq/ft). Everything leased out, there could be $6k+ monthly income, w/ just under $3k of expenses (including vacancy fund, repair/capEx fund, management (which I would do), taxes, etc.).
I would renovate over the summer and lease for end of August, early September. As I'm a new investor, I don't have private investors already, or the bank relationships to make it happen.
From more experienced investors, does this look like a good deal to start on? And how would you go about finding backers?
Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes
9y
$250k renovations on your first deals seems a little ambitious, not to mention getting that much work done in a summer seems extremely tight. I'd look for a duplex to house hack, maybe look into fha financing.
Investor · Hatboro, PA · Member since 2016 · 2k+ posts · 850 votes
9y
Hi Isaac,
I admire the ambition, but I agree with @Jonathan Klemm, it's more than you probably want to tackle for your first deal.
One issue is that if the property is not habitable when you buy it, you can't get owner-occupied financing (at least not easily). I would recommend finding a 2-4 unit building that only needs cosmetic work, and get FHA financing.
Here's a good case study, for how one new investor did it: