All Forum Posts by: Jarret Jarvis

House hacking is an incredible way to live affordably while building wealth through real estate. The idea is simple: purchase a property, live in one part, and rent out the rest to offset your mortgage or even generate profit. Chicago, with its vibrant neighborhoods and strong rental market, is a prime location for this strategy. Here are the top 10 tips to find the perfect house-hacking investment property in the Windy City:

1. Focus on Location

Chicago’s rental market varies widely by neighborhood. Areas like Logan Square, Lincoln Park, and Pilsen attract renters due to their trendy amenities and access to public transit. If a 2-bedroom unit rents for $1,800/month in these neighborhoods, you’re well-positioned to offset your mortgage.

2. Choose Multi-Unit Properties

Look for duplexes, triplexes, or properties with ADUs. For example, a $550,000 two-flat in Albany Park might bring in $2,500/month from the rented unit while you live in the other—covering most of your mortgage.

3. Understand Chicago Zoning

Chicago’s zoning regulations vary by ward. Verify that your property is zoned for rentals or ADUs. Renting a garden unit, for instance, could generate $1,200/month but must comply with city codes to avoid fines.

4. Evaluate Property Condition

Older Chicago buildings often have charm—but may come with hidden costs. Look for properties with updated roofs, electrical, and plumbing. Spending $15,000 on minor updates in a Hyde Park two-flat could raise the rental unit's value by $300/month.

5. Analyze Rental Income Potential

Run the numbers for your specific property. Suppose you buy a $700,000 three-flat in Avondale with a $5,000/month mortgage and rent out two units for $1,500 each. In that case, you’re living for $2,000 a month—while building equity in the home, benefiting from potential appreciation, and taking advantage of valuable tax write-offs!

6. Target Low Vacancy Rates

Chicago neighborhoods like Lakeview and West Town boast low vacancy rates, meaning fewer empty months. A vacancy could cost you $1,800 or more, so focus on areas with strong demand.

7. Seek Properties with Value-Add Potential

Invest in properties with room for improvement. Adding a washer/dryer to a $500,000 two-flat in Rogers Park could allow you to raise rents by $150/month, significantly boosting your ROI.

8. Prioritize Safety and Security

Renters value safe areas. A property near the 606 Trail in Logan Square could command $2,000/month, while the same unit in a less desirable area might rent for $1,300. Use crime maps and local insights to guide your search.

9. Emphasize Walkability and Transit Access

Properties near CTA train lines or buses rent faster. A unit within walking distance of the Blue Line in Wicker Park might rent for $2,200/month compared to $1,700 further away.

10. Explore Financing Options

Chicago offers excellent financing opportunities for house hackers. Use an FHA loan to purchase a $850,000 three-flat in Edgewater with just 3.5% down ($29,750). Rental income can cover most of your mortgage, letting you build equity quickly.

Why House Hack in Chicago?
With a dynamic real estate market, diverse neighborhoods, and high rental demand, Chicago is a fantastic place to invest in house hacking. Whether you’re eyeing a historic greystone in Bucktown or a classic brick two-flat in Irving Park, the Windy City offers endless opportunities to grow your wealth. 

@Paloma Wodehouse congratulations on starting your investment journey! Flipping and investing in real estate is an exciting path, especially with your husband’s expertise as a contractor—it’s a great advantage. 

If you’re open to exploring outside the Bay Area, markets like Milwaukee, Chicago, and parts of Indiana offer strong potential for flips and rentals. These areas have affordable entry points, diverse housing stock, and steady demand. Plus, they provide great opportunities for cash flow, especially if you’re looking to scale and reinvest profits into future properties.

If you’d like to connect or chat more about strategies, deals, or even market insights, feel free to reach out. Wishing you both success on this new venture!"

@James Wise well the PM should have been auditing the electric every month if they have it in their names and are paying for it. Also a good pm company will provide a P&L every month. In which the owner of the property should be auditing that every month looking for anomalies. 

Hi @Kris Tohovitis,

Welcome to the BP forum, and Happy New Year! It sounds like you’ve set a strong foundation for your real estate investing journey, especially with the time you’ve spent educating yourself. It’s also great that you already have equity in your primary residence and cash available—those are valuable resources for getting started.

If you’re considering a multifamily property, house hacking could be a great way to dip your toes into investing while minimizing risks. Living in one unit and renting out the others could offset a significant portion of your mortgage, giving you extra breathing room as the sole income earner. Plus, multifamily properties often qualify for owner-occupied financing options with lower interest rates and down payments.

As for timing, here are a few things to consider:

1. Market Conditions: Keep an eye on local market trends. If multifamily properties in your area are priced well, it might be worth moving forward sooner rather than later.
2. Risk Tolerance: Since you’re the sole provider, it’s crucial to ensure you have a solid emergency fund to cover unforeseen expenses, especially during vacancies or repairs.
3. Long-Term Goals: Think about how this investment fits into your long-term financial goals. Multifamily properties can be a great way to build wealth, but only if they align with your risk tolerance and lifestyle.

Hearing from others who’ve been in similar situations might also provide reassurance and ideas. Best of luck as you take the next steps, and feel free to share updates or ask more questions!

Best,

Jarret

Hi @Kris Tohovitis,

Welcome to the BP forum, and Happy New Year! It sounds like you’ve set a strong foundation for your real estate investing journey, especially with the time you’ve spent educating yourself. It’s also great that you already have equity in your primary residence and cash available—those are valuable resources for getting started.

If you’re considering a multifamily property, house hacking could be a great way to dip your toes into investing while minimizing risks. Living in one unit and renting out the others could offset a significant portion of your mortgage, giving you extra breathing room as the sole income earner. Plus, multifamily properties often qualify for owner-occupied financing options with lower interest rates and down payments.

As for timing, here are a few things to consider:

1. Market Conditions: Keep an eye on local market trends. If multifamily properties in your area are priced well, it might be worth moving forward sooner rather than later.
2. Risk Tolerance: Since you’re the sole provider, it’s crucial to ensure you have a solid emergency fund to cover unforeseen expenses, especially during vacancies or repairs.
3. Long-Term Goals: Think about how this investment fits into your long-term financial goals. Multifamily properties can be a great way to build wealth, but only if they align with your risk tolerance and lifestyle.

Hearing from others who’ve been in similar situations might also provide reassurance and ideas. Best of luck as you take the next steps, and feel free to share updates or ask more questions!

Best,

Jarret

Hi @Sebastian Nadal,

It sounds like you’re being thorough, which is great! Ensuring you choose the right roommate is so important. Here are a few suggestions to help with the process:

1. Use Zillow or a Similar Platform: If you already have a Zillow listing, having them apply through there is a good option. It simplifies the process since Zillow handles credit, income, and background checks for a small fee paid by the applicant.
2. Background Check Services: If you prefer not to use Zillow, consider using services like MySmartMove or RentSpree. These platforms are affordable and offer comprehensive reports (credit, background, eviction history) without you having to handle sensitive information directly.
3. Verify Employment and Landlord History: Your plan to request pay stubs and a landlord reference is solid. Be sure to actually contact the landlord for verification—fake references are more common than you’d think.
4. In-Person Meeting: Meeting potential roommates in person is a great way to get a feel for compatibility. It can also be an opportunity to discuss house rules and expectations to ensure you're on the same page.

While being cost-conscious is understandable, investing a little upfront for proper screening can save you a lot of trouble in the long run. Good luck, and I hope you find the perfect roommate!

Best,

Jarret

Hi @Jacob Dalton,

Thanks for sharing your situation—it’s clear you’ve put a lot of thought into this decision, and I can understand why you’re concerned given the challenges of being a landlord in Cook County.

Screening tenants is definitely a key step, but I agree it’s not foolproof. Here are a few additional strategies that might help mitigate risk if you decide to rent the property:

1. Hire a Strong Property Management Company: While you’ve already spoken with some PMs, consider finding one with extensive experience managing single-family rentals in Cook County specifically. A good property manager can help with tenant screening, enforce lease terms, and handle evictions more efficiently if it comes to that.
2. Require a Larger Security Deposit: Within the bounds of local regulations, a larger deposit can provide a cushion in case of damage or unpaid rent.
3. Consider Rent Guarantee Insurance: Some companies offer insurance products that can cover lost rent in case of tenant default. It’s worth researching to see if this might be a good fit for your situation.
4. Lease Structure and Clauses: Work with an attorney to draft a lease with strong clauses for late fees, maintenance responsibilities, and other terms to protect your interests.
5. Target Stable Tenant Profiles: While no tenant is risk-free, targeting tenant pools that historically have more stability (e.g., retirees, dual-income households, or tenants relocating for work) may reduce risk.
6. Stay Up to Date on Landlord-Tenant Laws: Understanding your rights and obligations can help you navigate issues more effectively if they arise.

That said, if the potential risks are keeping you up at night and the financial pressure of an eviction would be too much, selling may still be the best option for peace of mind. You’ve got a great property with a fantastic rate, so it should be appealing to buyers even in this market.

Ultimately, the decision comes down to your personal risk tolerance and financial situation. Whatever you decide, I wish you the best of luck, and feel free to keep us updated!

Best,

Jarret

Hi @Javade Jones,

That’s a great strategy! Seller financing can be a fantastic way to get into a 4+ unit property, especially in a competitive market like Chicago.

Have you started reaching out to owners directly or networking with agents who specialize in multifamily properties? Sometimes off-market deals can be a goldmine for seller-financed opportunities.

Let me know if you’d like any tips or resources—I’d be happy to help!

Best,

Jarret

Hi @Vivien Martin,

Welcome to BiggerPockets and congrats on starting your journey into real estate investing! A small multifamily property is a smart choice for a first investment—it offers a great balance of income potential and manageable scale for someone new to the space.

Don’t worry about being ambitious; it’s clear you’ve done your homework, and you’re already ahead of the game by setting a clear goal. The forums are full of experienced investors who are happy to share advice and tips to help you succeed.

Best,

Jarret

Here’s a response you can use:

Hi Jordan,

Happy New Year!

That’s a tough situation. Honestly, I think the PM bears some responsibility here. Switching the utilities into their name without safeguards in place—knowing the tenant might act out—seems like a misstep on their part.

While it’s true you’ll ultimately have to cover the cost, it doesn’t feel entirely fair for you to shoulder the consequence of their decision. If this is part of a pattern with the PM, I’d seriously reconsider working with them in the future. A good PM should protect your interests and anticipate potential risks like this.

Let me know how it all shakes out!

Best,

Jarret