Real Estate Market projections in Chicago

9 Replies

@Vante Jay Chicago has a lot of positives to offer an investor. Part of what I love about Chicago is that the building stock here is so high quality. The south side obviously has some amazing inventory, but really you can find great quality properties in a lot of different pockets. I have personally done very well with Berwyn and Cicero where the building stock is just incredible. 

Thanks John! I was doing some research in those areas and they definitely do have some upside! As a new real estate investor I'm looking under the 100k mark and there is plenty of opportunities in the Chicago area! I'm waiting to get my license before I start investing! I will be in contact with you down the line, Thanks!

@Vante Jay I second what @John Warren said. Chicago has tremendous housing compared to other cities. The Chicago metro area itself has tons of opportunity. Having your license as a buy side agent doesn't necessarily help you unless you're trying to collect the commission yourself as part of your deal, but you still have to do all the work.

If you're looking to get started for under 100K, I'm taking the liberty in assuming you've probably saved up about 30-40K? I would encourage you to consider either house hacking or maybe looking in NW Indiana, Rockford, Waukegan, etc. Most properties under 100K in Chicago require some degree of rehab.

Thanks! @Tony Angelos Yes I completely agree with the degree of rehab but since I already have a contractor in the Chicago area and a little more familiar with their market I was more so comfortable investing in Chicago... I took a look at the cities you've suggested and my question towards those cities is pretty much the same with Chicago.. what are their growth projections within the next five years? Do these cities have great potential to go up in value? Hows the demand for tenants? Indiana was definitely interesting as I never would have thought about investing there as well as Rockford but ill take more of a deep dive in those areas as I skimmed thru those cities ... Also I want to become an agent to have more access to  people that are in this industry and familiarizing myself with any and everything that has to do with Real Estate

I´d also be curious how people think the Chicago market compares to tertiary towns in central/southern IL ?

I can imagine the potential appreciation is higher in the right Chicago zip codes, but also more vulnerable to rental drops? The cash flow ROIs seem much better in places like Peoria, Kankakee etc

@Alexander Hogarth yeah it's an interesting subject, I don't know why but the southside of Chicago reminds me of how Atlanta was 3-4 years ago and I believe in the next 5 years it will be a lot different.. I looked around in those areas but are they receiving the same amount of traffic as the Chicago zip codes ?? 

@Vante Jay   90% of South side is the same today as it was 30 years ago and guess what? It will still be the same 30 years from now. It will not be like Atlanta LOL. and the building in south side that sells for $200,000 today? That will still be $200,000 five years from now.  But you will have to spend about $50K in repairs over the next 5 years. So when you get excited about the high cap rate, make sure you factor that in. When I say south side I am obviously not talking about few hot pockets like Bronzeville or Hyde Park. 

@Vante Jay - I don't think any of us know where the Chicago real estate market will be in 5-10 years, but my guess is it will continue to go up and be in a better place than it is now.  Personally, I really like investing in Chicago (outside of the snow/winters).  There is a variety of price points, all sizes (single families, 2-4 units, & medium-sized multi-family), and an endless supply of old inventory that needs to be rehabbed.

My hope is the taxes will get better compared to other markets but as long as you factor that into your numbers you should be alright anyways.