Success in Apartment Buy and Hold?

Question

Has anyone had success buying, holding, and renting out Condos/Apartments in Chicago and the surrounding suburbs?

Starting out I am struggling a bit to find affordable properties in the Chicagoland area that have good CoC returns that don't require a tremendous amount of work to rehab.

Wondering if this is a good area to look at since the entry point for these places are much lower than most of the inventory in Chicago. I also like the idea of not having to do as much maintenance since the HOA would be paying for all of the exterior maintenance.

Would love any feedback on things I should look out for when considering apartments/condos.

Mark Ainley · Answer

@Ross Carlson I will share with you a podcast episode with an investor out of the Elgin area that is all he focuses on is townhomes and the strategy has worked for him.  I am happy to connect you with him as well too if you wanted.

Jonathan Klemm · Answer

@Ross Carlson - I'd say there are definitely quite a few investors having successes in the Chicagoland area.  Definitely check them out on @Mark Ainley podcast https://www.straightupchicagoi...

Are there any specific suburbs you are looking into?  Personally, I know Elgin and Aurora typically provide decide cash flowing properties.  Down here in the City cash flow is quite a bit tougher to find.

I like the idea of flipping Chicago condos right now, but I am honestly not a huge fan of holding them unless you have a rock-solid process setup and a firm understanding of all numbers.

Ross Carlson · Answer

Thanks for the replies! Really appreciate the feedback thus far. I have been running into issues with finding properties that return decent cash flow for rentals in my area, so perhaps the flip route would work out well. My partner has over 30 years of experience as a builder so maybe this is the route to go.

@Jonathan Klemm I have mainly been looking in the Avondale, Portage Park, Old Irving park areas in addition to Waukegan (much further north than Chicago) for decent cash flowing places but like I mentioned above, finding cash on cash returns above 8% is pretty rare right now. Thanks

@Mark Ainley Thanks Mark! I will listen to this podcast today and see if this is something I want to pursue.

Dmitriy Fomichenko · Answer

@Ross Carlson good luck with your REI journey!

Michael K. · Answer

@Ross Carlson

Ross, it is definitely possible to achieve but your return will vary depending on what your willing to take on. And there is definitely a learning curve. I own a few mutli-families that have been able to cashflow for me.  PM me if you want help analyzing a deal.

John Warren · Answer

@Ross Carlson you are looking in some of the right areas for sure, but the building stock in those areas is older which makes it challenging in a lot of cases. There are definitely people doing well here in Chicago though, and I don't think you are going to find many markets that provide the diversity of opportunity that exits here. I have done well in Berwyn and Lyons for the most part, and I also have recently began to buy in Cicero. To be fair, I always end up taking on big projects but that is because I prefer value add over buying stabilized. There have definitely been deals that make sense that are stabilized.

Tom Casey · Answer

Hey @Ross Carlson, I am in the midst of finishing up the rehab for my first property which is a condo unit on Chicago's north side, Roger's Park neighborhood. From what I've seen, it is super tough right now to find any properties (including condos) with which the numbers make sense for cashflow/CoC return. You're going to be especially hard-pressed to find any that are also close to move-in ready.

However, I think it is still quite possible depending how much work and/or money you're willing to put into fixing a place up. We did a gut rehab on our current place and we would definitely cashflow if we decided to rent it out, but we are going to sell it instead and try to leverage that money into a multi-unit.

I think it's great that you're working with an experienced builder. If you really want buy and holds in the Chicagoland area, I'd pick his brain and bring him in on some rehab projects. You don't necessarily have to flip them once you fix them up. There is still a lot of room for cashflow as long as you get a pretty rundown property and make it nice. I'm sure he could help you out with that process.

Anyway, feel free to reach out anytime! I'm new to the real estate game as well and always looking to network.

Best,

Tom

Success in Apartment Buy and Hold?

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