buying a multi unit building (Chicago, Lincoln: apartment, to rent, condos)

[ToriaT]

Many people got into buying two or three flats not to become rich but with the idea that they could live in one unit, fix up the others and rent them out and they would be able to earn enough to defray or cover the mortgage payments. They were not intent on becoming real estate moguls just joe shmoes trying to make ends meet and doing the best they can for their families.

[Aleking]

Originally Posted by ToriaT

There are some buys to be had now. Probably in "fringe" areas that are not the greatest areas but might be in ten or more years. Here is an example of something:
3412 W. Lemoyne Ave This is a really cheap price and its clear it needs some fix up work. How this area will fare in five to ten years I do not know but many are saying Logan Square and Humboldt Park may be fruitful for buying in for future appreciation. Here is another one: 639 N. Hamlin
These are amazing prices but the areas are dicey and there are most likely gang activity. Nevertheless, it might be worth it to fix them up and rent them out especially if you do not plan on living in the unit. Any time you could get a multi family building on the north side for under 200K, that would be a good price. There would be lots of buildings to be had on the south side in bad areas but you would not want to go there even as a landload. Others on the board will chime in and say what exactly these places are like now, they are in Humboldt Park, which does not get a lot of love here generally, with a few exceptions. Thats why everyone keeps asking about the west of western ave. question as everyone is trying to figure out where these neighborhoods are going and whether cheap rent or real estate buys can be had there. Most of the other popular neighborhoods have gotten too expensive even now with the drop in prices. It will be very hard if not impossible to make any concrete plans to buy something without actually being here in chicago. and who knows how things will change in five to ten years.

Logan yes (although it's arguably already there in the most desirable spots), HP no.

[Aleking]

There are really very few slam dunk 'hoods for investing in multi units property. Some notes:

I won't waste time talking about "hood where you flat out won't find anything in your price range.

El access is huge both in terms of future appreciation prospects and rentability, gentrificaiton patterns of the last 20+ yrs are pretty clear, it always follows EL lines. This is a major (although not only) strike against Humboldt Park, as well as a major issue in some south side hoods with potential. If and when we do see another push into the city, especially one related to energy costs, the 'hoods best served by transit will be positioned best to capitalize.

Logan is talked about a lot, so much so that the best deals are long gone...The best parts of that neighbhood hood, ie those close to the El stops, square, etc have been expensive for some time...they probably still have some long term appreciation left but it's hardly the type of place where one will find a multi unit deal anywhere close to your budget.

[valpoguy]

Originally Posted by koctail

Why not just get your feet wet with something like this:

2941 S MICHIGAN Ave #509, CHICAGO, IL 60616 | MLS# 07922614

Ha! Looks like a steal until you see the $409 HOA fees for that piece of crap. That would be about 3 1/2 times your mortgage payment on a 30-year loan. With that much money every month in fees they should be totally remodeling the place.

[valpoguy]

Originally Posted by Aleking

El access is huge both in terms of future appreciation prospects and rentability,

This, along with proximity to desirable neighborhoods, is likely why Logan Square and Pilsen were among the most rapidly gentrifying neighborhoods before the 2008 market crash. If I had to guess, I'd expect that to continue if/when the market picks back up. It would definitely be a long-term investment at this point, though, and like you said it's not a slam dunk.

Ukrainian Village, which is stalled at a similar point of mid-gentrification (maybe even a little further along), is an exception to the El access rule, though, wouldn't you say?

[Aleking]

Originally Posted by valpoguy

This, along with proximity to desirable neighborhoods, is likely why Logan Square and Pilsen were among the most rapidly gentrifying neighborhoods before the 2008 market crash. If I had to guess, I'd expect that to continue if/when the market picks back up. It would definitely be a long-term investment at this point, though, and like you said it's not a slam dunk.

I like Pilsen as a future play, it's much cheaper than Logan (which I think it pretty much done) and has proximity to the loop and transit going for it. Negatives include persistent gang issues (although not as bad as Humboldt) and a presistent anti-gentrification movement.

I like El convenient portions of Pilsen, Avondale and Uptown as having the potential for the biggest percentage increase in property value if and when we ever see another rise...which could be decades out. I think the best gains in Logan have been realized...the only deals in that hood are in much less desirable HP adjacent/far from the El locations.

Originally Posted by valpoguy

Ukrainian Village, which is stalled at a similar point of mid-gentrification (maybe even a little further along), is an exception to the El access rule, though, wouldn't you say?

Ukie is close enough to the urban core that the lack of El access was mitigated...although the areas of the hood closest to the EL are the best. The far south/west portions are probably stuck for the near future. The sweet building stock didn't hurt either.

[urbanlife78]

Originally Posted by Aleking

I like Pilsen as a future play, it's much cheaper than Logan (which I think it pretty much done) and has proximity to the loop and transit going for it. Negatives include persistent gang issues (although not as bad as Humboldt) and a presistent anti-gentrification movement.

I like El convenient portions of Pilsen, Avondale and Uptown as having the potential for the biggest percentage increase in property value if and when we ever see another rise...which could be decades out. I think the best gains in Logan have been realized...the only deals in that hood are in much less desirable HP adjacent/far from the El locations.



Ukie is close enough to the urban core that the lack of El access was mitigated...although the areas of the hood closest to the EL are the best. The far south/west portions are probably stuck for the near future. The sweet building stock didn't hurt either.

Awesome, thanks for the info on this. There is always an issue with cities this size when trying to balance something within a price range and the quality of the area, especially when gangs and such are put into consideration. Even though my budget numbers are hypothetical.

If I do get into future owning in Chicago I will keep the El in mind. Talking about trains, what about those areas near the Metra? Other than knowing it has a much more extensive rail map, I don't know much about it and have yet to actually ride it cause whenever in Chicago I just relied on the El.

I am guessing I would probably stay away from much of the areas in the southside until there were some major improvements made to the area or where it didn't feel like a cheap deal was a waste of money cheap deal. Though it would be nice to see that part of Chicago really turn around because it is such an amazing city and that should reflect all throughout the city.

[aragx6]

Originally Posted by emathias

Cincinnati?

You might not have liked this advice, but it's possibly the best you got in this thread. For that kind of money you'd be way better off buying a multi-family in one of the midwest's smaller cities. Cleveland, Cincinnati, St. Louis, Milwaukee -- places like that are far easier to cash flow without a huge down payment.

[urbanlife78]

Originally Posted by aragx6

You might not have liked this advice, but it's possibly the best you got in this thread. For that kind of money you'd be way better off buying a multi-family in one of the midwest's smaller cities. Cleveland, Cincinnati, St. Louis, Milwaukee -- places like that are far easier to cash flow without a huge down payment.

That is true, and probably very much a possibility, but I was focusing more on cities I would want to live in, and I was noticing buildings I would be interested in, within my hypothetical price range within Chicago now. Though who knows, maybe with the right kind of planning, I might even be able to push my target price much higher than that.

[valpoguy]

Originally Posted by Aleking

I like Pilsen as a future play, it's much cheaper than Logan (which I think it pretty much done) and has proximity to the loop and transit going for it. Negatives include persistent gang issues (although not as bad as Humboldt) and a presistent anti-gentrification movement.

It sounds like you have either not spent much time in Pilsen lately, or have only spent time in the most gentrified parts of Loan Square. On the whole the two are much more similar in my view than you seem to think they are. Both have a handful (but not a lot) of nice coffee shops, bars, and restaurants. Both have affordable rent except in their most gentrified parts. Both have a combination of working-class Latinos, "hipsters" and a few yuppies. Logan is a little further along in the gentrification, but to say that it is "done" while Pilsen is some gang-infested anti-gentrification holdout is gross over-exaggeration, IMO.