Any advice on rules or partner deals for MTR in Chicago?

[Anastasia Rodriguez]

Hello All, so I have recently been looking into MTR in Chicago. I’m looking to get a condo 2bd/1bath or something similar near rush, Stroger/CC hospital, and UIC (not just looking to attract travel nurses I promise lol). Is there any advice specific to Chicago that would be important to know? Also please feel free to give advice specific to partnerships in Chicago or let me know of anyone who would be interested, (looking for someone who could potentially be a money partner or 50/50 for DP and other costs.)

(please give advice that is not beginner level, as I have been researching MTRs for months and already know the basics) 

[Dustin Tucker]

Maybe I'm just new, but what is a MTR? Is it a mid term rental? I'm curious why you think that a Mid term rental is a good investing strategy?

[Anastasia Rodriguez]

Hello yes, mid term rental! For me personally, I am looking to do a furnished unit and use my creativity to design a unit. I love that MTR turnover is not as frequent as short term rentals and there is usually higher opportunity to cash flow each month, although there are added expenses such as utilities, lawn or hoa fees etc., to account for. Also it would mean I get a different tenant pool for example travel medical professionals, displaced people due to insurance claims, digital nomads, etc and I really want to expand my knowledge outside of long term tenants and challenge myself to have a diverse portfolio of real estate! 

[Jonathan Klemm]

Hi @Anastasia Rodriguez - I have a mid-term rental just south of the south loop in Chicago.  It is in a smaller condo building and the unit is a 1 bed 1 bath.

If you are just looking for condos, just be very careful to understand what the HOA allows. Many require 6+ months for rentals. I found the strategy to be less intensive than short-term rentals, but still challenging at times because there is more turn-over than long-term rentals.

We make roughly 20% more on average in rental income with in being a Mid-term rental.

My advice for picking a strategy is just to pick ONE and go ALL IN on that, so you can scale it.  I've tried many different strategies, and all have turned out average...economy of scale and systems & processes play a key role in long-term success.

[Anastasia Rodriguez]

Thank you so much for sharing your experience and perspective!

[Nicole Heasley Beitenman]

Quote from @Anastasia Rodriguez:

Hello yes, mid term rental! For me personally, I am looking to do a furnished unit and use my creativity to design a unit. I love that MTR turnover is not as frequent as short term rentals and there is usually higher opportunity to cash flow each month, although there are added expenses such as utilities, lawn or hoa fees etc., to account for. Also it would mean I get a different tenant pool for example travel medical professionals, displaced people due to insurance claims, digital nomads, etc and I really want to expand my knowledge outside of long term tenants and challenge myself to have a diverse portfolio of real estate! 

 There's also the benefit of staying more hands-on with your property. I only have one MTR right now, so I'm self-managing. That means I'm in the unit a handful of times each year, and it helps me stay on top of maintenance WAY better than I could with an LTR. If you're looking for a more passive strategy, you may see this as a con, which is understandable. But I see it as a pro. 

[Zachary Deal]

I think the key with MTR is gauging the market and casting a wide, but calculated net at first. I would think Chicago, as with most major cities, has strong MTR potential if the property is located near hospitals or near the office buildings in the Loop. I would recommend checking out Furnished Finder and Airbnb/VRBO (30+ day stays) to see what other properties are listed in your area and level of furnishings/amenities etc. When listing the property I would list on those sites as well as Zillow at a minimum. Facebook in some areas can be successful as well. Reaching out to companies like ALE Solutions for insurance placements is a good idea and you can also try reaching out directly to the hospitals in your area.

Good luck!

[Jennie Berger]

Hey @Anastasia Rodriguez! I'm a huge MTR fan as well. :)

I've got a SFH in Knoxville TN, and a room/bathroom (in my 2 bed 2 bath apartment) here in Chicago, both of which I keep as MTRs and self-manage. Like you, I also love the design aspect and wide variety of potential renters this type of strategy works for.

I really like the IL Medical district area for MTRs and have looked there for myself in the past too. I'd be open to discussing possible partnerships - financial, co-hosting, and/or otherwise. Feel free to DM me and we can coordinate via email a time to chat or Google Meet.

Looking forward to connecting and best of luck with your journey!

Jennie Berger

Property People

[Bonnie Low]

Hi, Anastasia. You might want to join a group I co-host with @Jamie Banks called THE MTR Connect. We meet online Fridays at 9am (PST). It's a group of MTR hosts and aspiring MTR hosts from across the country. It's a great place to connect with other MTR operators who are sharing resources, helping each other trouble shoot, providing advice and mentorship. Let me know if you'd like the invite link. 

[Jamie Banks]

@Jillyan MacMorris she's an experienced MTR operator in Chicago

[Jonathan Klemm]

Hey @Bonnie Low - Just curious...how many MTR operators do you have in the group out of Chicago? 

I have one MTR here in Chicago and curious to see how it's working for other people in the area?

[Jillyan MacMorris]

Thank you for tagging me @Jamie Banks! I love this question. Have you operated an MTR before? My biggest piece of advice is to get a killer rental agreement/lease for Cook County. I don't use any of the boilerplate options, even from the realtors association. I would also make sure to add addenda regarding pets and furnishings, and make sure of course that any HOAs allow flexible leasing. Make sure to get a pretty tight tech stack figured out, especially to track your income and spending. Send me a direct message if you'd like to chat further! I exclusively operate in Cook County.

[John Warren]

@Anastasia Rodriguez I like the areas you are looking to invest in a lot. The whole UIC area is still undervalued I think, especially if you can buy on the fringe a bit. 

For the MTR strategy, I would focus on going to meetups to meet partners. I feel like real estate is such a people business. Online is ok for making some initial connections, but you would want to really know who your partner is to see if you want to be in a long-term partnership relationship with them. The values they have and the way they treat people (you) matters over the years, even more than the investment typically. 

[Bonnie Low]

Quote from @Jonathan Klemm:

Hey @Bonnie Low - Just curious...how many MTR operators do you have in the group out of Chicago? 

I have one MTR here in Chicago and curious to see how it's working for other people in the area?

I honestly can't remember where everyone is from, Jonathan. But we've got members from CA, Maine, Detroit, Philly, Cheyenne, Iowa, New Orleans, Cleveland, DC, Virginia, Texas, Las Vegas, Annapolis, KC....so pretty much all over. If you need to specifically connect with someone in Chicago I'd be happy to ask around for you. Just message me. 

[Natalia Ladzinska]

Quote from @Bonnie Low:

Hi, Anastasia. You might want to join a group I co-host with @Jamie Banks called THE MTR Connect. We meet online Fridays at 9am (PST). It's a group of MTR hosts and aspiring MTR hosts from across the country. It's a great place to connect with other MTR operators who are sharing resources, helping each other trouble shoot, providing advice and mentorship. Let me know if you'd like the invite link. 

Hi - can you please share more details about this online group? I am interested in joining! Thanks in advance.

[Anastasia Rodriguez]

@Bonnie Low yes I would love if you could send the link to my DM! I will definitely plan to join hopefully soon. 

[Bonnie Low]

Quote from @Natalia Ladzinska:

Quote from @Bonnie Low:

Hi, Anastasia. You might want to join a group I co-host with @Jamie Banks called THE MTR Connect. We meet online Fridays at 9am (PST). It's a group of MTR hosts and aspiring MTR hosts from across the country. It's a great place to connect with other MTR operators who are sharing resources, helping each other trouble shoot, providing advice and mentorship. Let me know if you'd like the invite link. 

Hi - can you please share more details about this online group? I am interested in joining! Thanks in advance.

Well, like I said this is a free virtual group for midterm rental hosts or those who are looking to start in this niche. It's a relatively small group - we try to keep active participants to around 25 during the calls so that people can speak up, engage and participate. We cover topics relevant to MTRs and often include guest speakers on topics ranging from financing your MTR to co-hosting to getting insurance placement bookings. We meet Fridays from 9-10am PST (noon EST). If you're interested in joining, just send me a PM with your email and phone.

[Kevin Morgan]

I've posted in this forum before on this subject (Chicago Mid-Term Rentals).  I'll just paste my previous post below (with a few updates):

I'm all in on my Chicago-area MTR operation. I now have 6 buildings with 39 total units.  I operate 35 of the units as Mid-Term rentals in suburban Chicago. I own all of the buildings except two (a 6- unit building and a 2-flat).  The 6-unit building I previously owned - I sold it and leased back the apartments from the new owner (Arbitrage/Master Lease).  The 2-flat I run on the arbitrage model.  I have a 2-flat under contract.  The other buildings are a 10-unit, a 9-unit, and two 6-unit buildings. 

I generally try to get 2X the market rent - and I get close to that amount most of the time. I run about 80% occupancy but much of the time I am 100% occupied.  There are a few slower months that bring my overall annual occupancy down to 80-85%. Since we are getting 2x market rent, my cash flow is many multiples of what I would get using a typical LTR tenant.

We only offer extended stays of 30 nights or greater. These are not full-amenity buildings. These are small vintage buildings but we have fully renovated and updated all of the units and common areas. We spend a lot of time furnishing and styling these units. They are decorated in a very stylish manner. We are generally trying to attract an upscale, professional guest. Some of the units have an in-unit washer and dryer (or we have a laundry room in the building). Most of the units have a dishwasher. On a case-by-case basis we allow pets. Each comes with 1 parking space. We have mostly have 1 and 2 bedroom apartment.  My 2-flats are 3-bedroom units (which are much in demand from "families" needing temporary furnished housing).  

Note: These are suburban buildings but in highly desirable towns with close proximity to downtown Chicago. So there is plenty to do in the suburbs itself. In other words, these are GREAT locations.

I used a traditional bank to finance the purchase of each of these buildings - using a traditional commercial real estate mortgage. The bank underwrites the loans using a traditional "market" rent analysis for the property. In other words, when purchasing they don't really consider my projections for the enhanced (very enhanced) cash flow from the furnished operation (although they understand this business and I provide detailed financial information to them).   For the most part, I've self-financed the renovations and furnishings of the apartments. Those capital expenditures are SIGNIFICANT at this scale.  

This is a completely self-managed operation (we don't use property management firm).  I  have a property manager, cleaning, and maintenance people.  We have our own laundry facility.  This is a COMPLICATED business to run at this scale.  Cleaning and maintenance pose significant challenges.  Overall revenue is over $1M and scaling up as we bring more units into the program.

I started with a single STR (as an experiment) in a six-unit building that I owned. I've scaled up from there - eventually converting my furnished business from STRs to MTRs and converting most of my units from long-term tenants to MTRs.

[Jennie Berger]

@Kevin Morgan which areas/suburbs are your MTRs located in?

[Kevin Morgan]

@Jennie Berger Oak Park, Forest Park, River Forest, La Grange, La Grange Park