Investor · Chicago, IL · Member since 2026 · 11 posts · 6 votes
I'm a rookie investor looking to purchase my first property in Chicago IL. I've got my certificate of eligibility from the VA, and would like to househack a 2-4 unit building. I'm a trained commercial interior designer and so is my gf, and I currently do business development for a local firm. My GF and I love the city, so I've been looking in neighborhoods like Gold Coast, Lincoln Park, Lakeview East, Avondale, West Town, Wicker Park, Bucktown, Logan Square, Humboldt Park, Buena Park, Old Irving Park, Lincoln Square, etc. I understand these are all neighborhoods with high dollar amount properties, many are aging, and supply has been low, but between what I've been approved for and the 75% rule, I have been watching and waiting for the right deal. I'm looking for a couple of things at the moment, a mentor, and maybe a reality check. What can I be doing now to put me in a position to move forward in 8 months? What are the experienced opinions on the market's I'm looking at? What's the best way for me to go from decision paralysis to signing up my first deal? Is this an SOS? It might be..thanks all!
Hi Jake. I don’t have any experience with VA loans, but as far as decision paralysis…I learn by jumping in and figuring it out. I get it’s not for everyone, but at some point you do gotta jump in. If you know where the numbers need to be for your deal to work…time to jump!
Hi Jake. I don’t have any experience with VA loans, but as far as decision paralysis…I learn by jumping in and figuring it out. I get it’s not for everyone, but at some point you do gotta jump in. If you know where the numbers need to be for your deal to work…time to jump!
Investor · Pacific Northwest · Member since 2026 · 538 posts · 302 votes
3w
You’re not in SOS territory — you’re just trying to solve too many variables at once.
Your biggest advantage is actually your design background. For a Chicago 2–4 unit, I’d stop waiting for a “great deal” and spend the next 8 months building a brutally specific buy box: purchase-price ceiling, legal unit count, neighborhood, realistic rents, taxes/insurance, rehab tolerance, and the maximum monthly housing cost you’re willing to carry after rent.
Then underwrite everything that hits it. After 30–50 properties, the paralysis usually disappears because you know what “good” looks like before it shows up.
One Chicago-specific caution: verify zoning/legal unit status and actual tax/insurance numbers early. A building that looks perfect on rent can change quickly once those are corrected.
If you want, send me your VA approval amount and the basic economics you’re targeting. I’m happy to help you pressure-test the buy box before you spend the next eight months guessing.
Investor · Chicago, IL · Member since 2026 · 11 posts · 6 votes
3w
Michael, this is some great information and with some great suggestions to boot! I sincerely appreciate it. I'll shoot you a DM with some more specifics, and a question. Thanks again!
Investor · Chicago, IL · Member since 2026 · 11 posts · 6 votes
2w
Hi Aaron...super validating, I came to that conclusion later than I should have(maybe a week ago) and I'm slapping my forehead not realizing that sooner. From what I understand VA has a pretty strict home inspection process, so this first deal would need to be a turnkey. My thought for value add was to do some cosmetic improvements to my own unit as I live in it. Then when I'm ready to jump to my next property, do a cash out refinance to get it out of my name and into an LLC(which will also free up that eligibility on my VA loan so I could use it again), and use that equity to put towards the next investment. Not holding myself too strict to that plan but that's what I've been bouncing around in my head.
Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes
3w
Hey @Jake Grittmann - Sounds like you are already doing the right things in preparation. Networking, educating (podcasts, books, etc.), and taking action (analysis, offers, etc.).
I think the most important thing to consider with those Chicago neighborhoods is don't focus SO MUCH on the numbers. Find a property that is somewhere you will be happy living. It's really tough to find a property that cashflows great, but if you can pay less out of your pocket than what you would pay in rent in the same area I consider it a win.
Consider connecting with @Edgar Barbosa who is an agent and also used a VA loan personally. If you can do the VA renovation loan thats where you can really create some good equity.
Investor · Chicago, IL · Member since 2026 · 11 posts · 6 votes
2w
Hi Jonathan, thanks for your thoughts and for the levity! I went through quite an initial period of "this needs to cash flow like crazy or else it's not for me" and came to the conclusion that isn't necessary to support my "why". Saving on cost of living to allow for deeper savings(and more investing) is the goal for me. I went the long way round to come to the same conclusion...that I do care about where I live(shocker). I will absolutely take you up on that suggestion to reach out to Edgar, thanks and let's stay connected!
Connect with an agent who has experience working with investors and house hackers. They should be able to help you with underwriting properties and educate you on what's realistic for your situation given current market conditions.
Right now, I recommend getting clear regarding your "buy box" or buying criteria. Evaluate your goals & expectations and your deal breakers. This will clarify what you're looking for and allow you to better focus on the opportunities that have potential.
Whether those areas make sense for you depend on (1) your budget (2) your expectation for building wealth (what's a win for you?) (3) timeline (do you need to more time to accumulate more funds?) and (4) what building condition is acceptable to you (VA has property requirements to consider).
The best way to avoid analysis paralysis is to clarify your buying criteria. This reduces uncertainty, which makes it easier to make decisions. Also, work with an experienced agent who will be able to educate and coach you on how to underwrite deals and navigate due diligence & the escrow process.
Lender · MD · Member since 2025 · 162 posts · 62 votes
3w
I think you're asking the right questions at the right time. Over the next 8 months, I'd focus on analyzing as many 2-4 unit properties as you can and getting comfortable estimating rents, expenses, and financing costs. That way, when the right deal comes along, you'll be making a decision based on numbers instead of emotion.
You're also in a unique position with a VA loan, so I'd spend some time understanding how to maximize that benefit for a house hack. If you ever want to talk through financing scenarios or compare different loan options for a property you're considering, I'd be happy to help.
Investor · Chicago, IL · Member since 2026 · 11 posts · 6 votes
2w
Gregory, thank you for your comments and suggestions. I'm sensing a theme in these replies! I haven't done near enough market/deal analysis. Thanks for offering your support, I'll certainly need a good lender to team with in my future endeavors, the first couple may go VA, but after that the goal is to have some capital for other loan types!
Real Estate Agent · Boise, ID · Member since 2017 · 562 posts · 376 votes
3w
You’re actually in a pretty good spot having 8 months before you’re looking to buy. If it were me, I’d spend that time analyzing as many 2–4 units as possible and really learning the numbers in the neighborhoods you’re considering.One thing I’d be careful of is separating what the lender says you canafford from what actually makes sense as an investment. Being able to use 75% of the rents from the other units to help qualify with a VA loan is huge, but I'd still want the property to make sense after you eventually move out.
I’d start a simple spreadsheet now. Track asking price, rents, what you think market rent is, taxes, insurance, utilities, condition, estimated repairs and eventually what it sells for. Do that on 30-50 properties over the next 8 months and I think a lot of the decision paralysis goes away. You’ll start recognizing pretty quickly when something is priced well.
I’d also narrow down what you really want this first property to do for you. Are you trying to live as cheaply as possible? Appreciation? Force appreciation through renovations? Cash flow once you move out? Probably some combination of allof them but knowing which ones matter most will help narrow that neighborhood list down.
With both of you having design backgrounds, I would actually look at that as an advantage. I’d be looking for something ugly with good bones in an area you want to own long term. Something where other buyers walk in and see work, but you guys can see what it could be.
You also have 8 months to build your team. Find a lender who does a lot of VA 2–4 unit loans specifically, an agent who actually understands small multifamily and preferably invests themselves, a good inspector and a couple local investors who own properties in the neighborhoods you're looking at. Start going to local meet ups and you can likely find the people you are looking for.
Last thing, come up with a buy box now. Price range, 2–4 units, neighborhoods, max rehab you're comfortable with and what the numbers need to look like after you move out. Then just start analyzing everything that fits.
You don't need to predict the market or find the perfect deal. You just need to get good enough at looking at deals that when a good one comes along, you recognize it.
Investor · Chicago, IL · Member since 2026 · 11 posts · 6 votes
2w
Ryan, your response has been immensely helpful. I appreciate how in depth you went to give me some advice and I appreciate that sincerely. I won't lie, as exciting as this process has been, I couldn't pin down my hesitations and you hit the nail on the head of all of them. I will be taking this in stride...and in the future please don't hesitate to see me as a resource as well!
Lender · Huntington Beach · Member since 2023 · 10 posts · 6 votes
3w
Jake, I am not licensed in Illinois but the VA questions in this thread are worth answering for anyone reading. Hope it helps!
Aaron asked whether rehab money can be rolled into a VA loan. It can. VA has an alteration and repair loan, usually called the VA renovation loan. The practical limits: most lenders cap the renovation piece around $50,000, the work has to be done by a VA registered contractor, and only a handful of lenders actually offer the product. It is not the 203(k) and it is not as flexible. If that is the route, find the lender who does them before you fall in love with a building.
The bigger item for your 8 month plan is how the rent from the other units gets treated. You mentioned the 75% rule. That is the appraiser's market rent less a 25% vacancy factor, and on a VA multi unit it is not automatic. VA conditions the use of that projected rent on reserves and on documented experience managing rental units, and lenders layer their own overlays on top. Two lenders can look at the same fourplex and hand you two different purchase prices. It depends on if you go with big banks, credit unions, direct lenders or mortgage broker and each one has it's own way of looking at the same guidelines
So the thing to do this week, before you underwrite another Logan Square three flat, is ask your lender in writing how they treat projected rent on a 2 unit versus a 3 or 4 unit, and what reserves they want in each case. That answer sets your real ceiling. The buy box everyone is telling you to build is only as good as the number at the top of it.
One more that catches people. Occupancy is a certification. You are stating you intend to occupy one unit as your primary residence, generally within 60 days of closing. That is what makes the whole structure work and it is not a place to get creative.
For the vets here who bought a 3 or 4 unit with VA, did your lender count the projected rent, and what did they want for reserves? Thank you and good luck out there!
West Group Capital, LLC powered by NEXA Lending, LLC
Investor · Chicago, IL · Member since 2026 · 11 posts · 6 votes
2w
Quy, super helpful man seriously. I have read every page of the VA home loan guidelines...watched the youtube breakdowns, and I'm no simpleton but that thing is dense for a layman. You explained a few key points that I needed a better understanding of so thank you. Follow up question....and I think I know the answer, I last connected with my lender about a year ago(had a job change and life change that paused my investment endeavors) but after some thorough reinvestment in myself and career came out of it with 32% more yearly income. Has enough time passed for me to use this income to re engage a lender to positively effect my upper limit?
For yourself and the forum, if you've used a VA Renovation Loan for a 3-4 Unit Property, how did you implement the renovations while satisfying occupancy? Not shying away from sleeping on the floor and eating ramen for awhile, just curious what strategies have worked to maximize use of funds and also plan for the best logistics of project delivery.
Lender · National Lender · Member since 2026 · 10 posts · 3 votes
3w
Hey Jake - you're actually thinking about this the right way by starting 8 months out instead of waiting until you find a property.
One thing I'd do now is have someone run your VA entitlement and buying power specifically for a 2–4 unit property. VA can be a great tool for house hacking, but financing a 3–4 unit is a little different than buying a normal single-family home. The property still has to work within VA/lender guidelines, you'll need to occupy one of the units as your primary residence, and depending on the property, projected rental income from the other units may be able to help you qualify.
I'd also be careful about assuming the 75% rule means you can automatically qualify for whatever price point you're looking at. Your income, debts, entitlement, taxes/insurance, reserves and the actual rents on the property all matter.
If I were in your shoes, I'd spend the next 8 months doing three things: get a realistic financing ceiling for a 2–4 unit VA purchase, build cash reserves even if you're planning on 0% down, and start analyzing actual properties every week so you know what a good deal looks like when one comes up.
I wouldn't consider this analysis paralysis yet. You're 8 months out and learning the market. The key is getting specific enough that when the right property shows up, you already know whether you can execute.
Investor · Chicago, IL · Member since 2026 · 11 posts · 6 votes
2w
Marcus, thank you so much for the reply. All great suggestions...I do have a follow up question. In my experience, I was unable to know my buying power without getting qualified for a loan, which involved a hard credit check and the understanding that I would need to close on a property within 120 days. Was my previous lender enforcing a lender specific policy? Is that a general requirement across all loans? How can I ask lenders to run my VA Entitlement to figure out my buying power in the best way?
Lender · Schaumburg, IL · Member since 2015 · 833 posts · 774 votes
2w
@Jake Grittmann welcome to BP and very thoughtful post. Echoing many here, it is great that you are preparing and weighing your options. The VA loan is an unfair superpower, especially when it comes to 2-4 unit house hacking, and it appears you have uncovered its magic. I have been doing mortgages in Chicago for 28 years and I actually teach VA lending, so I feel qualified to chime in here.
First off, you mentioned your VA entitlement and said that you have already been approved, please be sure that you are working with a LO that truly understands all the nuances of VA lending, and especially on 2-4 unit properties. I can already tell from the other lender posts here that there is bad/insufficient info being given. Let me address some of the things that you should be aware of.
If this is your first use of the VA loan (sounds like it is), there is NO CAP on your loan amount with 0 down. That's right, you could buy a $2M 4-unit if you wanted to (and qualified), with 0 down. Your entitlement amount means nothing, as long as you have your base entitlement eligibility. Where the amount comes into play is with secondary entitlement, or buying a second property with VA. Which if you are looking at a 2-4 unit in the areas you mentioned, that likely won't be an option for you, there likely won't be enough entitlement left over.
You can only use rental income from the other units for qualifying if you either have landlord experience, or hire a property manager (there is a hack for this). And you will need 6 months reserves in order to use rental income. Which means if your monthly mortgage payment will be $5,000/mo, you will need $30K in reserves, after whatever you use for closing, if anything. This can be savings, investment accounts, retirement, etc.
VA loans do not have a debt-to-income ratio, unlike Conventional or FHA lending. Instead, everything is based on your residual income (monthly income left over after your monthly liabilities). Which makes VA loans much easier to qualify for than Conventional lending, and higher buying power.
The areas you are looking at (NW side, A & B neighborhoods) it will be challenging to positively cash flow. As a few here have said, you will be buying for an appreciation play, and having tenants pay off the property in 30 years. Think of it this way... If you buy a $1M property, and are upside down $1000/mo for 30 years, that means you will have paid $360K for what will probably be a $2M+ paid off asset in 30 years, with little to no money initially invested. That's a win in my book. Obviously I am over-simplifying, but the point is don't be afraid if you aren't cash flowing on a property like this.
But...where the above could matter, is if this is the first of multiple properties that you will be house hacking, negative cash flow will eat into your debt-to-income ratio on the next one. So not only is it important to strategize on this property, but also to look ahead to properties 2,3,4 and making sure that whatever you buy now isn't going to hurt you in the future.
There are dozens of other VA guideline and strategy tidbits, too many to mention here. Just be sure that you are aligned with a LO that knows VA lending well, it's not the same as Conventional lending, and frankly most LO's don't know all the nuances, so vet them well (no pun intended). And then when you add the real estate investing side, it's even more important to map things out and make sure you are setting yourself up for future success and not getting stuck. If I can ever be of help, feel free to reach out.
Lender · Denver, CO · Member since 2017 · 156 posts · 69 votes
2w
Jake, on the income question: once you're back working steadily, a lender is going to requalify you off what you're earning now, not what a lender said a year ago. VA doesn't impose some fixed waiting period like six months or a year before a higher income counts. What matters more is documentation. If you're still in the same line of work and just earning more, current paystubs and a recent verification of employment usually get you there quickly. If you changed jobs or fields during that gap, expect the lender to want a bit more history to show the new income is stable, sometimes a full 12 to 24 months depending on how different the new role is from the old one. Either way, get requalified now rather than waiting, since your buying power is one of the inputs that shapes the whole buy box everyone's telling you to build.
On the renovation and occupancy question: the VA alteration and repair loan does let you close and move in before the work is done, but you have to be able to occupy safely at closing, so it's not built for a full gut. What tends to work in practice is doing the cosmetic and non-structural items room by room after you move in, living in the finished space while the next room gets done, and saving anything that would make the unit uninhabitable, like a kitchen demo, for a stretch where you can camp in another room or unit if it's vacant. Talk to your contractor about sequencing before you're under contract, not after.
Investor · Chicago, IL · Member since 2026 · 11 posts · 6 votes
2w
Hi Ray, got it, and too easy.
Thanks for the suggestions on the repairs as well....I'm in the process of building my team here in Chicago, so will be leaning on this forum and public meetups to get some contractor suggestions. I'm not so sold(yet) on not going turnkey for this first one, but good to know for the future. Cheers Ray!
CPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
2w
For a first 2–4 unit house hack, I’d spend the next 8 months getting really good at one thing: underwriting the same type of deal over and over again.
Pick a realistic buy box based on your VA approval, the monthly payment you can comfortably carry, and the rents you could reasonably collect from the other units. Then start analyzing actual Chicago 2–4 unit listings every week. Look at rent, taxes, insurance, vacancy, maintenance, CapEx, utilities, and what the property looks like if one unit is vacant for a few months.
Your design background can help a lot with spotting functional layouts and value-add opportunities, but I’d still be careful with older multifamily. Roof, plumbing, electrical, sewer, foundation, boilers/HVAC, and deferred maintenance can matter a lot more than cosmetic upside.
I’d also avoid forcing the 75% rule onto every property. A good house hack should work because the financing, rents, expenses, and your own housing cost make sense together, not because it fits one shortcut.
From the tax side, once you live in one unit and rent the others, the property becomes mixed-use. Certain expenses and depreciation generally need to be allocated between the personal and rental portions, so I’d keep the setup and records clean from day one.
One other thing to think through with your girlfriend: if you both go into the investment together and create a partnership, you’ll generally have a separate partnership tax filing in addition to your individual returns. So ownership percentages, capital contributions, profit/loss sharing, and who is actually on title should be decided before closing rather than handled informally later.
The best way out of decision paralysis is probably to analyze 20–30 real deals before you’re ready to buy. By the time your lease and timeline line up, you’ll know much faster what deserves an offer.
Feel free to DM me. I’d be happy to send over a few resources that might help you get more comfortable analyzing your first house hack.
Real Estate Agent · Colorado Springs, CO · Member since 2018 · 1k+ posts · 1k+ votes
2w
I house hacked my first property on a $35k/year salary as a social worker. VA loan made it possible, and the rules people get wrong are worth spelling out here.
The big one: VA loans don't have a debt-to-income cap the way FHA and conventional do. That gives you more flexibility than most buyers realize, especially if you're carrying student loans or a car payment.
On the house hacking side, the lender will typically count 75% of projected rental income from the other units toward your qualifying income before you've even signed a tenant. Get a rent schedule from an appraiser and that number is locked in at underwriting.
One thing worth knowing if you ever sell: VA loans are assumable. Any buyer (veteran or civilian) can take over your exact rate and balance. If you bought at 3% and rates are at 6.8% when you sell, that's a $900-$1,000/month difference in payment for the buyer. That's your negotiating edge down the road, and most VA owners don't even know it exists.
The entitlement restoration piece trips people up too. When you sell and the buyer assumes the loan, you don't automatically get your entitlement back unless you do a substitution of entitlement or pay the loan off. Worth a conversation with a VA-savvy lender before you structure the sale.
Good move using the VA benefit. It's the best zero-down product in existence, and house hacking with it is exactly what it was designed for.
Real Estate Broker · Chicago and Kansas City · Member since 2016 · 80 posts · 62 votes
1w
Jake, the 8 month runway is an advantage, not a problem. Most people give themselves 8 days of looking before they write their first offer. You get to do this the calm way.
One reality check on the neighborhoods you listed. In the last 12 months of recorded Cook County sales, the typical 2-flat near the North Side lakefront sold for around $950,000, and around Lincoln Park and Near North most sales cleared $1 million. Zero down on a building like that is a very large monthly payment, and even strong rents up there cover a smaller slice of it. That is not a reason to cross those areas off. It is a reason to also walk buildings a couple neighborhoods west. The typical Northwest Side 2-flat sold for about $575,000 last year. Same brick, same two units, and rent makes a real dent in the payment.
What I would do with the 8 months: pick three neighborhoods, walk 15 buildings, and track what each one actually sells for. Decision paralysis is usually a data problem, not a personality problem. Nobody freezes on a building when they know what the one down the block just closed at.
And find a lender who closes VA on 2 to 4 unit buildings in Chicago regularly. The occupancy and rent-counting details are worth getting right from someone who does it every month.
You are closer than you think. The hardest part of the first building is deciding you are actually doing it, and it sounds like you already have.
