Chicago · 2 to 4 unit buildings
Most of our clients are buying their first building. You do not need to have it figured out before you call. That part we do together.
Skin in the game. An agent who has never owned a rental reads a building the way the listing describes it. Somebody who has owned a few reads it the way it will behave once it is yours. Dan has been buying and renting in Chicago for twenty years with his own money.
Often, and it comes down to which rent you use. On one Chicago street the same two bedroom can go for $1,100 or for $2,500. The low end is usually an owner who paid the building off and stopped raising rent. Use the middle of that range and almost nothing works. We use the top third, because that is what the unit rents for today.
Put a real address into the deal analyzer. It fills in the rents and the expenses and shows you what the building would earn. Every number in it is yours to change, and you can run as many buildings as you want without talking to anybody.
It is the New York of the Midwest, and people who move here after college tend to stay. World class restaurants, the second biggest theater city in the country, transit good enough that you do not need a car but can still park one. United, McDonald's, Motorola and Allstate are all based here, and the consulting firms bring people in for one to three years who rent the whole time. On one Chicago street you will find a building at $350,000 and another at $850,000.
More of them work than people expect. A 2-flat runs near $500K in Albany Park and near $900K in Lakeview, and both are good buys for different reasons. We have written up over a hundred Chicago neighborhoods and suburbs with real prices and rents, so you can narrow it down before you tour anything.
Two things move the numbers more than anything else you notice on a walkthrough. Whether the units are metered separately for electric and gas, because separate meters mean the tenants pay their own utilities. And the age of the furnaces, water heaters and roof, which tells you what you will be spending in the next few years. We are in and out of investment buildings every day, so we can usually tell you both before you pay for an inspection.
The lease comes with the building. If a tenant has nine months left, those nine months are yours to honor at the rent they pay now. Chicago also asks for notice before you raise rent or end a lease, thirty to a hundred and twenty days depending on how long they have lived there. If they are month to month, meaning no end date and either side can end it with notice, you have a lot more room.
Yes, and plenty of our clients do. Many buy from out of state without ever standing in the building. We walk it on video, read you the leases, and tell you which ones we would pass on. Come see it if you can.
Less than most people think. If you are going to live in one of the units, an FHA loan can get you into a two unit building for 3.5% down, with some conditions your lender will walk you through. For three and four unit buildings, 5% down on a conventional loan gets you there. On a $600,000 building that is $30,000. Dan's first place was a house hack where a renter covered 60% of his mortgage.
Just reach out. You do not need a budget worked out, a lender lined up, or a building picked. Most of the people who contact us are months away from buying, and that is exactly the right time to start talking.
What investor clients say
Aspiring investors, look no further! Dan understands the real estate investing game very well and is perfect for anyone looking to find a distressed multi-family home to add value to.
Craig Kalinowski · ZillowGreat experience working with Dan and his entire team. They took the time to help me find the perfect rental property. Their knowledge of the market and Chicago real estate is exceptional.
luclanglois5 · ZillowStarting our investment journey in Chicagoland was a breeze, all thanks to Dan Nelson. With his years in the game, he really understands what works and what doesn't.
Brandon Teng · ZillowYou do not need to know what you want yet. Most people who reach out don't.
Reach outDan Nelson is a broker at Compass in Chicago, with 20+ years buying rentals and flipping properties.