All Forum Posts by: Gloria Wiekert

Can't wait for this one!! There's a lot of mystery around renovations, especially for newer investors, I'm excited to dig in!

@Jenna Herr, my partner and I considered this exact same thing for the past year and ended up house hacking in Chicago. I grew up in both the Rockford and Champaign/Urbana areas and he went to UIUC so we had two lower cost options that we both felt comfortable with and required much less capital to purchase in. We toured properties in both towns and found a few good options that would cash flow well, but ultimately we chose to house hack in Chicago first for two reasons:

1. We felt that our downpayment was being used more efficiently. For example: $25k is a 25% downpayment on a $100k property elsewhere, but could purchase up to a $700k 4 unit property in Chicago with an owner occupied FHA 3.5% down loan.

2. We realized that if we had purchased the small investment property first, that any cash flow from that would technically go in our landlord's pocket if we were still renting. Or, we'd still be paying rent out of our salaries. Either way, our money is going in another landlord's pocket instead of our own. With the house hack, we made sure that if we weren't cash flowing, then our monthly payment after collecting tenant rent was less than the market rental value for the apartment we occupy. In both scenarios, if your monthly payment after collecting rents is $1,000, then in the house hack scenario that $1k is building equity in OUR property, and in the smaller investment property scenario that same $1k is building equity for someone else. 

All this being said, school districts were not a high priority for us since we don't have kids yet, just two lovable pups. Depending on where in Chicago you want to be this line of thinking might not apply in the same way, especially if 2-4 unit properties in your preferred school districts are priced higher than the FHA loan limits. There are plenty of other factors we considered, like the true cash on cash return rate for both properties and appreciation potential, but ultimately decided to focus more on the option that was better overall for our personal finances. We feel that we have more flexibility on future purchases now that we've secured an investment that doubles as a home.

TL;DR - go for the house hack!! :-D

@Claire Rosenberg if you do find a wholesale deal you like, I recommend calling David Goldhirsh with LeaderOne for your loan. I work with a few wholesalers to find off market properties and because FHA almost never works for wholesales I send those properties to my cash buyers only. However, there was a perfect house hack wholesale last year and David was able to help my clients close with a low downpayment. I believe the interest rate and fees are a little higher than FHA or conventional but if the numbers still work it's a good option to consider.

Hi @Amily Yi-Chieh Tseng! You should give @Michael Facchini a call, he's the branch manager at Fairway Mortgage in Chicago. He's helped dozens of my team's clients fund a low downpayment "house hack" multi unit purchase in Chicagoland and could walk you through your best options. He's an investor himself so he knows all sides. Chase isn't bad, but my transaction experience with multi unit clients who use Chase hasn't been great. Their loan officers don't typical specialize in this type of purchase and there are a lot more moving parts compared to a condo/SFH.

What neighborhoods/suburbs are you looking in? 

@Joshua Haynes I've been looking into Rockford and Champaign recently myself. I'm in Chicago now but grew up near Chambana and went to middle school/high school/college in/near Rockford so I know both cities decently well if you want to chat about good investment areas in each. 

@Jonathan Klemm is right, Champaign is a college town but there are still plenty of deals in good areas that are inhabited more by year-round residents. The historic neighborhood surrounding West Side Park, for example, is a great one because it's a little too far from campus but walking distance to downtown Champaign where residents go to avoid the campus bars. Any student tenant over there will most likely be a grad student looking for peace and quiet. The fact that it's a college town also means it's really well set up with property management companies if you need one.

I think Rockford has much more appreciation potential than Champaign. There's a long, long history of why downtown suffered so much, but the current mayor Tom McNamara and his administration are doing wonders to breathe life back into it. When I lived there almost no one went downtown, and now it's where all the cool events are happening, exciting new restaurants are opening, and the neighborhoods around it are improving. 

Similarly, check out the Quad Cities and Peoria, though I don't know as much about them from an investment standpoint. I do have contacts in QC that could help if you're interested.  

Hi @Marcele Johnson! Congrats on your first investment property!! What neighborhood?

I recommend checking out the Events page on BP for meetups in the area. There's a great one on the third Monday of the month at Sully's House in Lincoln Park, and my team does one on the third Wednesday of every month in Lakeview. Meetups are a great way to meet other investors and learn from each other. Our topic next week is Landlord and Leasing Best Practices which seems timely for you :)

@Erin Garcia in Chicago, check out neighborhoods like Jefferson Park, Portage Park, McKinley Park, Canaryville, Little Village, Bronzeville, and Woodlawn like you mentioned. It's all very block by block but all of these neighborhoods are starting to appreciate but still have good/low priced deals.

I'd also recommend checking out Rockford, IL if you're looking just outside of Chicago. I'm from there and in the past 5 years there has been a ton of development downtown. Several neighborhoods surrounding downtown have low priced rental properties that will cash flow well. I've been eyeing the market there for a while but I'm currently focused on my house hack in Chicago to start... there were some good deals that were hard to pass on. 

SO happy to see a thread like this! First time house hacker, long time investment realtor in Chicago. Nice to meet you all!

Hi Teresa! The Deal Analysis link didn't work for me. I'm happy to take a look - can you try posting again? Or DM me to exchange contact info and we can use a screenshot. The property is beautiful! And Portage Park is a great neighborhood to invest in with all the new small businesses popping up. 

Hey Angelo! Are there certain neighborhoods you might be interested? Cap rates and ROI's vary greatly depending on where you're looking. If you're brand new I highly suggest checking out multi unit and investor meetups in Chicago. You can find a list under Network: Events on BP. There are a bunch coming up this week if you can make it, they're great places to start gathering information and meet new and experienced investors.