South Shore area is 6700 South to 8900 South - Stoney Island east to the lakefront. The area has seen steady appreciation - a very large development is planned at 89th and the lakefront - empty land along the shipping channel.
I've read that Pilsen is the new Bucktown - after doing a fair amount of analysis of the buildings available, I am not convinced the current prices are worth the price - simply my opinion.
Hope that helps!
cash flow depends on 3 key factors:
down payment (affects loan amount)
full doc or stated loan (affects interest rate on loan amount)
With your price rangeI'd say the optimum senario would be to purchase (2) two unit building w/ finished basements on the city's south side EAST of the dan ryan. (one in south shores as Thomas suggest and maybe another in washington park or woodlawn) appraised values are at 350K and the industry standard for multi unit investments is a 10% down payment. since you have the capital I would say put down 15% on each. You'll have a lower interest rate going full doc, however, stated programs are investor friendly. the difference in rate is about a 2 points on the rate which will affect your cash flow by a couple of points. Rental rates in the area are about 1300/unit and I anticipate that they're bump up as we get closer to October 2nd 2009.
worst cash senario you cash flow even and hold for the appreciation that's to come from the 1.1 billion dollar Olympic Village and the 370 miilion Olympic Stadium.
find an experienced loan officer and make him your best friend.
When it comes to Investment property one of the most important points to consider is proximity to transportation. Once you've looked into that you can assess the financials of the various buildings along with their condition and operating costs to determine their return/loss.
A positive cashflow is difficult to attain in areas that are close to the city or have seen gentrification through condo conversions over the past few years. Properties once valued on income alone are also valued today based on their land value (teardown potential for new construction) and the ability to convert units to condo.
A good approach is to buy a mixed use building with a commercial storefront with residential units above. Take a buy and hold approach and watch over the years as rents increase beyond your carrying costs. Division street from Ashland to Leavitt has seen a big rejuvenation over the last 6-7 years with more still to come. Division west of Western is just starting to see the same occur.
Best of luck.
I would focus on other investors as opposed to realtors. I do agree with Thomas Hall, we are finding incredible opportunities in the Historic Chicago South Shore neighborhoods. Our cookie Cutter has been Single Family REO Foreclosures. Average cash flow $500.00 per month per home. The neighborhood is made of 65% to 70% renters.That ratio is growing do to the number of foreclosures. We can reccomend several good investor clubs. We also have excess inventory, and have been wholesaling these properties to other investors in our network. http://www.nannerbuyshouses.com Come join a network investors that are helping place people in homes and making a whole bunch of money doing it. We are people helping people, creating wealth, abundance, and enlightened millionaires.
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If you are looking beyond downtown, I might consider near Midway airport, Lyons or Summit. The reference is Patti's profile page to read through her posts.