North Lawndale (Chicago, Oak Park, Marshall: section 8, renting, mortgage)

[hendersj31]

Did you go in the gate and put a donation in the bucket?

Originally Posted by Master Jay

Well, when I took jfre81 on my personal Chicago tour, he did snap some shots of the Gallegher house from "Shameless" on at 2119 South Homan Ave. So there is THAT.

[hendersj31]

Yeah I though there was at least some new builds on the north side. Thinking North of the tracks if I recall correctly. Not sure that really means anything since its really not a great neighborhood.

Originally Posted by BRU67

I agree with your assessment generally. I think east of the park is a good investment that'll pay off soon. But the secret's out on this and there are not a lot of properties in that small area. Sophisticated cash investors are already knocking on doors trying to get in. So when something over there does come up on MLS, it's either massively overpriced, a complete basket case, or, usually, a combination of both! You'll be paying for future value essentially.

Millennials and other amateurs are buying somewhat vigorously at the present time in North Lawndale west and north of the park. Realtors are telling them what you say about north and, also, that west is going to improve because East Garfield Park is improving and it's right off the Pink Line. Eh.... maybe they're right, I dunno. But this activity has driven prices up enough so that while it's not as crazily priced as Humboldt Park or East Garfield Park are, you're still paying an awful lot for a high crime area that doesn't feature a lot of amenities. You could get basically the same quality of life and demographics, as well as rent levels, in Englewood or Austin, or suburban Riverdale or Calumet City, for a whole lot less money!

I think these parts of North Lawndale may be a good long term bet, but I think they're gonna do what South Shore and East Garfield Park did c. 2004-08, where the amateurs all rush in, create gentrification buzz, only to have market the pull back on everyone during the next downturn. In other words, I see a rental property in one of those areas as a 10 year plus investment product, at least. So knowing that, if I was gonna roll the dice and buy in those areas, I'd get a larger building (4+ units) for cash flow and hire a professional manager who knows how to deal with that kind of tenant base.

[Master Jay]

hendersj31, good day. Actually, I drove. Jfre81 got out of my car and took pictures. If my memory is correct, he did not go past the gate. We'll have to see if he responds; if he went in the gate/left a donation, etc.. I drove through Little Village and en route to the north side, I suggested we drive past that house.... I should have looked up the house where Dr. King resided, for a short period. I believe that was in North Lawndale, as well.

[BRU67]

Originally Posted by hendersj31

Yeah I though there was at least some new builds on the north side. Thinking North of the tracks if I recall correctly. Not sure that really means anything since its really not a great neighborhood.

Outside the Cinespace/Lagunita's orbit, there is a combination of a couple new developments, mostly on the northeast side between Roosevelt and Harrison and Western and the tracks, and many plucky young buyers wanting to get in on gentrification but lacking the money or connections to buy into more "sure" areas like Humboldt Park and East Garfield Park.

That can go a long way and in three years, we all may be kicking ourselves in our booties for not jumping in. But I'd still be pretty skeptical given the cost. It just really isn't all that cheap over there anymore for what you (currently) get. Plus crime is definitely a problem. If you just Must invest there, I recommend staying as close to Western and the Blue Line as possible.

I would also wait for this coronavirus thing to play out. While I think we will recover from it without a full on recession, I also think it is going to make some people think two or three times before just throwing money around like they are now. I would be in no hurry to invest in Chicago real estate. I would watch for a little while.

[dtcbnd03]

Originally Posted by BRU67

mostly on the northeast side between Roosevelt and Harrison and Western and the tracks

That's techinically Tri-Taylor which has a big 50 single family home development going in at 2500 W Lexington. The train tracks, Lions Rugby Field, Altgeld, Brinks, etc. provide a barrier between Tri Taylor and North Lawndale so will the development jump that barrier? I don't think it will for a while given all the open land to fill in before reaching Lawndale.

https://therealdeal.com/chicago/2020...hicago%20Daily

[BRU67]

Originally Posted by dtcbnd03

That's techinically Tri-Taylor which has a big 50 single family home development going in at 2500 W Lexington. The train tracks, Lions Rugby Field, Altgeld, Brinks, etc. provide a barrier between Tri Taylor and North Lawndale so will the development jump that barrier? I don't think it will for a while given all the open land to fill in before reaching Lawndale.

https://therealdeal.com/chicago/2020...hicago%20Daily

Yes, correct. Tri-Taylor extends past Western to the railroad tracks. Then it's North Lawndale. It's just a good sign to see things going on west of Western because for years, that was a hard and fast border you did not cross if you were an Emerald City denizen. Now I see students walking over there all the time, and some new townhomes have been built. There are rumors of a new coffee shop coming to a space near Polk and Western.

To your question, I don't know. It's pretty grungy and high crime west of the tracks, particularly around Kedzie and Harrison. It'd take some brave pioneers to move into that area. I think Millennials are buying there, but it doesn't appear they're living there, just yet anyway. I mean, it's really all about numbers. If enough of them earnestly believe in it, it will change fast, like an uplifting Lifetime movie.

Personally, I think an economic downturn will bring things to a griding halt before that happens, and it'll be awhile before it starts back up again. This is, of course, just my guess. That is why I'd take a step back and watch for awhile.

[dtcbnd03]

Originally Posted by BRU67

Personally, I think an economic downturn will bring things to a griding halt before that happens, and it'll be awhile before it starts back up again. This is, of course, just my guess. That is why I'd take a step back and watch for awhile.

I agree. We're very long in the economic boom cycle and Chicago/Illinois has WAY too much debt so these fringe areas will get hit hard. We're getting a taste of what will happen on these overblown virus fears. Now throw in a real financial downturn...

On the flip side, nationwide housing shortage will become more severe over the coming years. I'm not sure how this translates to Chicago but perhaps coastal cities will look at the cheap housing here and fill in hoods like Lawndale quickly. We'll see...

[BRU67]

Originally Posted by dtcbnd03

I agree. We're very long in the economic boom cycle and Chicago/Illinois has WAY too much debt so these fringe areas will get hit hard. We're getting a taste of what will happen on these overblown virus fears. Now throw in a real financial downturn...

On the flip side, nationwide housing shortage will become more severe over the coming years. I'm not sure how this translates to Chicago but perhaps coastal cities will look at the cheap housing here and fill in hoods like Lawndale quickly. We'll see...

I think some of the coastal money is already here now, though it is focused on the bigger names like Pilsen, Logan Square, Bridgeport, Humboldt Park, West Town, etc. That's causing the chain reaction that's pushing the less funded amateurs into North Lawndale. However, as anyone who has riden on a roller coaster knows, the rear cars get whipsawed a lot more during turmolt, and that's what's very likely going to happen here once the economy hits a speedbump.

If you believe in North Lawndale, I'd wait until that occurs. There may be some great deals as the young investors realize they're not going to become overnight millionaires and that managing a building, especially in a rough area, isn't easy. There are really very few good deals right now, unless you accidentally stumble into one a-- over teakettle.

[BRU67]

Another thing that's germane to this discussion is that it seems most of NL's inventory is two and three flats (with the classic Chicago Greystone being the best example). Those make sense if you are going to live in one unit and use the other unit (or two if lucky) to offset the mortgage because the apartments are big and spacious and often have cool vintage features. But they make very little sense if you're not going to be living in it because their cash flow is pretty weak, and can be easily wiped out by a major repair.

Yet they're selling pretty rapidly. I think when the reality sets in that most of North Lawndale isn't going to quickly gentrify, you'll see a lot of these back on the market. That same thing could happen in East Garfield Park too, which also has a lot of these smaller rental buildings, if the West Loop push doesn't hit it good before the next downturn.

[WestSideMillennial]

Originally Posted by BRU67

Another thing that's germane to this discussion is that it seems most of NL's inventory is two and three flats (with the classic Chicago Greystone being the best example). Those make sense if you are going to live in one unit and use the other unit (or two if lucky) to offset the mortgage because the apartments are big and spacious and often have cool vintage features. But they make very little sense if you're not going to be living in it because their cash flow is pretty weak, and can be easily wiped out by a major repair.

Yet they're selling pretty rapidly. I think when the reality sets in that most of North Lawndale isn't going to quickly gentrify, you'll see a lot of these back on the market. That same thing could happen in East Garfield Park too, which also has a lot of these smaller rental buildings, if the West Loop push doesn't hit it good before the next downturn.

Converting those beautiful greystone houses into single family homes is also a recent popular option. That's happening a lot now in East Humboldt Park.