What areas to invest in for real estate? (Chicago, Highland: apartment, foreclosures)

[BRU67]

Originally Posted by projectmaximus

Yeah I have been researching Chicago hard and made two offers that nearly got under contract, but ultimately I'm thinking most likely I'll be sitting out on Chicago until the next downturn. Hopefully I'll be ready to move then.

In the meantime I'll be more focused on our higher cashflow areas that won't suffer (as) much in a downturn.

Good call. Just out of curiosity, how were you able to put two offers on properties here if you live in Miami?

[TBideon]

Is there really low inventory in Chicago? It's a huge city and there are TONS of affordable (let's say under $300,000) single family homes available in stable neighborhoods like Albany Park, Portage Park, Belmont Cragin/Central, especially Garfield Ridge, etc. Sure it's not Lakeview or Hyde Park, but there is a massive amount of inventory in many of the functional, working class neighborhoods.


Obviously the really rough areas have an enormous number of homes, but I'm guessing the average transplant or investor doesn't want to live in the majority of those southside neighborhoods.

[BRU67]

Originally Posted by TBideon

Is there really low inventory in Chicago? It's a huge city and there are TONS of affordable (let's say under $300,000) single family homes available in stable neighborhoods like Albany Park, Portage Park, Belmont Cragin/Central, especially Garfield Ridge, etc. Sure it's not Lakeview or Hyde Park, but there is a massive amount of inventory in many of the functional, working class neighborhoods.


Obviously the really rough areas have an enormous number of homes, but I'm guessing the average transplant or investor doesn't want to live in the majority of those southside neighborhoods.

There is low inventory of multi-units in the areas I've mentioned, and a lot of ridiculous bidding. My guess is a lot of it is driven by amateur investors who dream of living for free while gentrification fattens up their net worth. I think a lot of these individuals lack understanding what goes into renovating and managing a rental building, and how unpredictable neighbourhood change really is. I cannot speak to single family homes as I've not been monitoring that market. There could be an inventory glut of SFHs, I have no idea truthfully.

I will say that if the changes to the Tax Code pass through the House without major changes from the Senate bill, that may put a damper on SFH and condo activity all over, because it's going to raise the standard deduction to the point where deducting mortgage interest, property taxes, and insurance will not be advantageous over renting for most people.

[Vlajos]

The inventory of SFH and Condos on the market in Chicago is very low, only about a 4 month supply. A balanced market is typically viewed as 6 months supply.

[BRU67]

Originally Posted by Vlajos

The inventory of SFH and Condos on the market in Chicago is very low, only about a 4 month supply. A balanced market is typically viewed as 6 months supply.

Ah ok. Thanks. Given the upcoming changes to the Tax Code, I might then offer the same advice to SFH and condo purchasers, as well as those of multi-family units.

[OKParker]

Originally Posted by projectmaximus

Yeah I have been researching Chicago hard and made two offers that nearly got under contract, but ultimately I'm thinking most likely I'll be sitting out on Chicago until the next downturn. Hopefully I'll be ready to move then.

In the meantime I'll be more focused on our higher cashflow areas that won't suffer (as) much in a downturn.

I went under contract on a property a few days that is a 20 minute L ride to the loop that currently generates $5500/month in outdated OK condition. Its a 4 unit with taxes that are 18k/year.. Should be able to get 100k/year in rent after updating kitchens/baths.

[Fighting Fungus]

Here are some predictions for Chicago 2018 real estate


http://www.chicagobusiness.com/reale...0-here-in-2018



Chicago Area Home Price Gains Improve But Still Lag Most Of Country

[projectmaximus]

Originally Posted by BRU67

Good call. Just out of curiosity, how were you able to put two offers on properties here if you live in Miami?

They were both on Hubzu (and in fact were two of the areas I asked about on this thread). So when I say "offers" what I really mean is I was the highest bidder but below reserve price and hubzu's automated algorithms asked me if I would counter with a higher bid and I said no. That said I wouldn't have any issues offering on properties the more traditional route once I have a realtor and property management I trust. And I receive off market listings from wholesalers all the time.

Originally Posted by OKParker

I went under contract on a property a few days that is a 20 minute L ride to the loop that currently generates $5500/month in outdated OK condition. Its a 4 unit with taxes that are 18k/year.. Should be able to get 100k/year in rent after updating kitchens/baths.

Congrats. What'd it cost ya?

[OKParker]

Originally Posted by projectmaximus

Congrats. What'd it cost ya?

$495 but it comes with 5k seller money upfront for repairs.

[SkylarkPhotoBooth]

Originally Posted by TBideon

Is there really low inventory in Chicago? It's a huge city and there are TONS of affordable (let's say under $300,000) single family homes available in stable neighborhoods like Albany Park, Portage Park, Belmont Cragin/Central, especially Garfield Ridge, etc.

Those neighborhoods are pretty far out, more suburban in nature and generally less desirable for urban dwellers. Until pretty recently you could get units for $200-250K in some of the more desirable/central neighborhoods of the city. I think it's pretty clear we are in another housing bubble at the moment.