You mention that you live in the area.
There is a lot of good housing stock in North Lawndale and based on the numbers you mentioned below about your investment parameters, I would encourage you to connect with Bardan Azari @ CPI LLC, http://www.cherrypickerinvestments.com
They are a foreclosure buyer service for investors, rehabbers and desiring landlords who want to get the right property at the best price. Also, his firm works in conjunction with Realtors, so you if already have a contractual agreement in place to be represented, you are in even better company because you can now have sets of professionals helping you identify the best investment real estate opportunities.
Based on some of our clients recent purchases in North Lawndale, they are acquiring houses for $30,000 to $60,000 and spending from $5,000 to $20,000 to fix them up for tenancy and then generating $1,000 to $1,300 / month in rental income. Depending on much cash versus financing you utilize, your cash on cash return can be from 15 to 30% which far outpaces what you can earn in the stock market. Lawndale and Garfield Park have been two of the harder hit neighborhoods due to the sheer volume of investor owned properties.
Granted, not everyone wants to be a landlord, but it seems you are committed to making the neighborhood better by being one of the accountable landlords!
Kudos to you!
PahRoo Appraisal & Consultancy
With that in mind, you would be required to put down a certain percentage re the loan as it would be considered investor but I think you know this already.
You want everything covered, PITI, water and have the tenant pay for the utilities. Tenant maintains the yard (snow removal/lawn maintenance, but you monitor. You need to consider that you need to have a return on your monthly income of no less then $300 after everything is paid for including yourself, for management.
One of the things I suggest to my clients is that the names of the individuals who will occupy are to be listed and an automatic increase in rent by "x" amount of dollars should you find out that someone is living there who isn't on the lease ...even for short term.
The City of Chicago has a program too for renters that you might want to consider.
Bottom is you need to factor in the age of the roof, the cost to repair and add that and other things such as Furnace, Central Air, Windows, Appliances as they are considered the Debt Service Ratio ... which is the amount of money you need to "reserve" each month from rental to replace those items and then pay yourself and still have a $300 surplus.
Hope this helps you to figure out what you need to get in rent when being an investor. It all depends upon the location, the amenities offered in the home as well as number of bedrooms.
Barb Van Stensel
Keller Williams Lincoln Square
2156 W. Montrose
Chicago, IL 60618
What a great time to be searching for an investment property.And there are definitely great deals out there.
What areas are of interest to you?
Is this your first investment property purchase?
Best bet for you is to find a realtor experienced with exactly what you're looking for.
Give us a call at 312.242.1000 - we have a good number of experienced agents who will be able to help you for sure.
Best of luck to you!
I am a real estate investor and have properites in those area available with section 8 currently rented tenants. Contact me and we can talk further. My e-mail address is firstname.lastname@example.org
I have helped many investors purchase these kinds of property. PLease contact me.
Over $150mill sold!
Brian Grossman Group