Commercial Real Estate Broker · Chicago, IL · Member since 2017 · 16 posts · 6 votes
Hi - We are under contract on our first buy and hold that we have been able to find that has decent numbers...Would appreciate any reaction or input anyone has to this deal...good/bad/bad assumptions etc.
Location - 63rd and Halsted (very close to the new whole foods development
Property - Grey stone with 2 units (3 bed/1 bath) unfinished basement with laundy and 2 car garage. Owner doesn't know exactly when remodeled but likely between 2009 - 2012 so is in pretty good condition. One unit is owner occupied right now and 2 one has never been rented.
Price - 105,500
Financing - 25% down at 4.625
Rents - $1000 per unit so $2000 monthly...hoping that is conservative but curious thoughts...
Developer · Chicago, IL · Member since 2013 · 434 posts · 357 votes
9y
I would suggest you find your property management company before you even look to purchase. Be sure to put them under the fire. Look at properties they are currently managing, talk to the tenants and the owners. Property management will make or break the investment.
Also, without seeing the property, I would assume a 10% repair estimate is very low. Most properties in war zones (that I've seen) were rehabbed with bubble gum and duct tape. Make sure you get an inspection and reevaluate that 10% estimate.
Real Estate Investor · Charlotte, NC · Member since 2016 · 92 posts · 103 votes
9y
Take this with a grain of salt as it's been a few years since I've been to Chicago, but I view 63rd and Halsted as a war zone. Out of the 77 communities in Chicago, the Chicago Tribune ranks it as the 9th most violent. Personally, I'd be looking for a cap rate higher than 9.5% if investing in Englewood.
New York, NY · Member since 2017 · 25 posts · 5 votes
9y
@Leslie Frieze I use areavibes.com to better understand the crime in the neighborhood. You are buying in a place where the violent crime is 1,378 per 100k people = extremely high/war zone. Be ready for cash flow on paper but not in reality. As a rule of thumb, I don't buy in areas where violent crime is over 1,000, so 1,378 is way out of my comfort zone.
Developer · Chicago, IL · Member since 2013 · 434 posts · 357 votes
9y
I would suggest you find your property management company before you even look to purchase. Be sure to put them under the fire. Look at properties they are currently managing, talk to the tenants and the owners. Property management will make or break the investment.
Also, without seeing the property, I would assume a 10% repair estimate is very low. Most properties in war zones (that I've seen) were rehabbed with bubble gum and duct tape. Make sure you get an inspection and reevaluate that 10% estimate.
Naperville, IL · Member since 2017 · 19 posts · 8 votes
8y
@Leslie Frieze I'm a new aspiring REI and I lived in the Chicagoland area. I just wanted to comment that I'm impressed that you would be willing to invest in that area. If you do, please keep us updated on how it's working out. My fear from that area is that the tenant will be delinquent with their rent and could become potential squatters.
Country Club Hills, IL · Member since 2018 · 51 posts · 45 votes
8y
@Ronan M. I was at a meeting the other night with John and Charlie, talking about my areas of interest and where I'm moving deals and whatnot. They said we should meet/talk. I've got two off-market deals locked up in Englewood (brick multi units)...some leads in south shore, woodlawn. Etc. I'm gonna PM you.