Investment Property in Pullman (Chicago: section 8, rental, insurance)

[leroy217]

Good morning! My wife and I are very interested in purchasing a three unit building in Pullman's historic area near 113th and Langley. I know this maybe a very vague question, but what are your thoughts on this investment based on the current situation and future outlook of the area? I know that the area west (Roseland) is not the best area, but I see potential in this little pocket. Similar to Hyde Park on the South Side.


What do you all think? Should we pull the trigger?


Thanks in advance!!

[BRU67]

Originally Posted by leroy217

Good morning! My wife and I are very interested in purchasing a three unit building in Pullman's historic area near 113th and Langley. I know this maybe a very vague question, but what are your thoughts on this investment based on the current situation and future outlook of the area? I know that the area west (Roseland) is not the best area, but I see potential in this little pocket. Similar to Hyde Park on the South Side.


What do you all think? Should we pull the trigger?


Thanks in advance!!

It depends at what price point and what your cash flow would be after expenses. That's something you should definitely check into. I think a lot of new investors in multi units are not checking that and just assuming a rental building will make them rich. Obviously not worth having it if it's not going to positive cash flow after mortgage, insurance and maintenance, as that area is not likely to experience gentrification.

[Nearwest]

Pullman is a neighborhood within the city of Chicago. You might get more responses to your query if you post in the Chicago forum, and not in Chicago Suburbs form.

[Curly Q. Bobalink]

Originally Posted by leroy217

Good morning! My wife and I are very interested in purchasing a three unit building in Pullman's historic area near 113th and Langley. I know this maybe a very vague question, but what are your thoughts on this investment based on the current situation and future outlook of the area? I know that the area west (Roseland) is not the best area, but I see potential in this little pocket. Similar to Hyde Park on the South Side.
What do you all think? Should we pull the trigger?
Thanks in advance!!

What are the economics of the purchase? Will the rent pay the full mortgage, taxes, insurance, administration (taxes, rent collection, taxes, etc.), and upkeep (assuming you pay contractors to do the work)? If not, why would you want to buy it? Also, I would not assume income from the property is "(# of units) times (rent per unit) times (12 months)", I think you should count on each unit being vacant for one or two months per year to be on the safe side (what do other landlords use for the occupancy rate?). Is it, or could it be, Section 8? At least the Feds pay their rent on time.

I have a buddy who owns a trailer park in central Illinois. He currently has no rental units, it was a friggin' nightmare dealing with the professional freeloaders who moved in and then quit paying rent after a couple of months, his rental trailers were largely money-losers due to the lost rent, legal costs to evict, and rehabbing the damage the deadbeats caused after he got them out. Over time, he tore them down rather than rehab them, and sleeps much better these days, even though his income took a hit. Personally, if I were looking to buy rental property, it would be commercial (a warehouse or self-store building or something), that you can simply lock the door on if the tenant quits paying rent. Illinois law is without a doubt on the side of the deadbeats over the property owners, I myself wouldn't own residential rental property in Illinois on a bet. Do you plan on collecting rents yourself, or do you plan to hire a management company?

[leroy217]

Originally Posted by Nearwest

Pullman is a neighborhood within the city of Chicago. You might get more responses to your query if you post in the Chicago forum, and not in Chicago Suburbs form.

I did post in the Chicago forum.

[leroy217]

Originally Posted by Curly Q. Bobalink

What are the economics of the purchase? Will the rent pay the full mortgage, taxes, insurance, administration (taxes, rent collection, taxes, etc.), and upkeep (assuming you pay contractors to do the work)? If not, why would you want to buy it? Also, I would not assume income from the property is "(# of units) times (rent per unit) times (12 months)", I think you should count on each unit being vacant for one or two months per year to be on the safe side (what do other landlords use for the occupancy rate?). Is it, or could it be, Section 8? At least the Feds pay their rent on time.

I have a buddy who owns a trailer park in central Illinois. He currently has no rental units, it was a friggin' nightmare dealing with the professional freeloaders who moved in and then quit paying rent after a couple of months, his rental trailers were largely money-losers due to the lost rent, legal costs to evict, and rehabbing the damage the deadbeats caused after he got them out. Over time, he tore them down rather than rehab them, and sleeps much better these days, even though his income took a hit. Personally, if I were looking to buy rental property, it would be commercial (a warehouse or self-store building or something), that you can simply lock the door on if the tenant quits paying rent. Illinois law is without a doubt on the side of the deadbeats over the property owners, I myself wouldn't own residential rental property in Illinois on a bet. Do you plan on collecting rents yourself, or do you plan to hire a management company?

Well two of the units are occupied with tenants. The tenants are to pay all utilities but water. The empty unit is in great shape and can possibly rent for up to $1000. Not going to do section 8, the area is beginning to revitalize. Will not hire a management company at first because we live close.