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New deal coming next Thursday 3/25 to Chicago's Chatham neighborhood. 3 blocks south of the new Discover Call Center prioritizing most of the 1000 new jobs to people who live close. Job pay starts at 17.50/hr offering Discover's full benefits suite to provide major boost to the area. Tons of new development already going up along 87th street.
Analysis is Pro-Forma, building has been mismanaged for well over a decade. Current owner has owned a year but needs to sell to prioritize funds on another rehab. Within the past year building has had: New roof with over 50% of the lumber replaced, new gutter system, tuck pointing, rebuilt boiler system, new decking system added.
Value add opportunities:
-Cosmetic updates to units
-Bring rent to market (been stagnant for as long as I can tell, long term elderly tenants)
-Convert (at a minimum) 1 of the 3 oversized 1 bedroom units to a 2 bedroom. The other two can probably be converted but not as easily.
-Add Paid Laundry. Nearest laundromat is kind of far.
- Rent garage spots or offer as part of higher rent.
-Add storage in basement. May not raise rent but may offer incentive to move in over competition
This area is primed for growth over the next decade. The City of Chicago is incentivizing heavily for investment into the area. Bus stop is right outside with easy access to transportation to Discover's facility (3 min CTA ride) or 11 minute walk.
@Tony Angelos - Is this a deal you are taking down or putting out there for others to look into?
I definitely like the numbers. How come no property management though?
@Jonathan Klemm I'm selling it, it's going live on the MLS this Thursday.
Great question, it's been self managed by the prior two owners. And something odd I've noticed is that 50-60% of the people I've spoken lately are looking to self manage. I suspect it's because returns are getting squeezed and in many situations it would be the only way to make a deal work, or it could be overzealous new investors who figure it's an easy job 😂.
Regardless, even with a PM, the numbers still look good. Intentionally, too. I understand it's a mixed use so there won't be as much demand as if it were a true residential building.
@Tony Angelos - What is the commercial space being used as currently? And what are you going to list at?
If you come across any other off-market heavy value add deals you definitely know who to call! Let's partner up on one soon.
@Jonathan Klemm List is going to be at 250 and it's being used as a hair salon which has been there for 6 years I believe.
And definitely, gonna shoot you a text now to run some ideas by you!