Close to Lake Shore Drive. Walk to the Oakwood Beach and lakefront.
Public transportation at your doorstep. The Bronzeville real estate market is hot.
Schedule your showing today. Buy Bronzeville! Asking Price $280,000.

Front

For more information, please call or text Mark at 773-354-6693.

Until the next time,

Mark Killion
Kale Realty
2447 N. Ashland
Chicago, IL 60614

Cell: 773-354-6693

Send me a note!

Visit me online: https://www.buybronzeville.com

EQUAL HOUSING OPPORTUNITY

Chicago Cap Rate – Heat Map

Hello to all my blog readers out there!

Here is a heat map of Chicago Cap Rates by neighborhood.

Neighborhoods with a darker shade, have higher cap rates.

If a neighborhood has a lighter shade, it means the cap rate is lower in that area.

If a neighborhood has no shade at all, it means there were no multi-family sales for the time period.

This sales data was taken from the Multiple Listing system.

The median cap rate in Chicago is about 6.8%.

I spent a lot of time putting this heat map together,

so I hope you find this information useful.

If you have any questions, please send me a note: mark@markkillion.com

You can also text me at 773-354-6693 or visit me online at: www.buybronzeville.com

Thanks,

Mark Killion, Real Estate Broker

Kale Realty – 2447 N Ashland Ave – Chicago, IL 60614

Cell: 773-354-6693

Office: 312-939-5253

Visit me online today: www.buybronzeville.com

Equal Housing Opportunity

Chicago Multi-Family Income Property

Hello to all my blog readers out there!

I am back with some more great information for you.

I just analyzed the last 2 years of sales information for Chicago multi-family properties.

My main goal was to derive Chicago cap rates by neighborhood.

There is not a lot of good cap rate information out there by neighborhood.

But, I was happy to find that my last post about Chicago cap rates is still ranking high on Google!

What is Cap Rate?

Here is a refresher on the concept of Cap Rates.

According to Investopedia:

“The capitalization rate, often referred to as the “cap rate”,

Capitalization Rate = Net Operating Income / Current Market Value”

Please keep in mind that this is a high level analysis.

It should give you a ballpark idea of cap rates in the various Chicago neighborhoods.

But some assumptions were made for this analysis.

For example, to determine the net income for a property, I assumed it would be 50% of the Gross Rental Income.

Also, I tried to weed out properties that require a significant amount of rehab work.

Typically those properties will sell below market value and they will make the cap rate look deceptively high.

I also tried to weed out properties that were vacant.

In this year’s analysis, I included the number of properties that were sold in that neighborhood for the time period considered. So if only 1 or 2 properties were sold in the 2 year period, I would not be extremely confident in the displayed cap rate.

However, if several properties were sold in the 2 year period, you can have a higher level of confidence in the displayed cap rate.

If you are considering purchasing an investment property in Chicago for $300,000 or more, I would be happy to do a more detailed analysis for you. Of course, this is assuming I would be your buyer’s agent and represent you in the transaction. As much as I enjoy helping others, I have to keep the lights on

Either way, I hope you find this information useful.

Feel free to leave a comment here… or send me a note: mark@markkillion.com

You can also text me at 773-354-6693 or visit me online at: www.buybronzeville.com

Thanks,

Mark Killion, Real Estate Broker

Kale Realty – 2447 N Ashland Ave – Chicago, IL 60614

Cell: 773-354-6693

Equal Housing Opportunity

Chicago Cap Rates by neighborhood

Chicago Cap Rates by neighborhood

Chicago Cap Rates by neighborhood

Chicago Cap Rates by neighborhood

Jackson Park Highlands – Hidden Gem in Chicago

Jackson Park Highlands is a hidden gem on the south side of Chicago.
It sits inside of the larger south shore neighborhood.
The homes in this small neighborhood are absolutely amazing!

A Jackson Park Highlands block in early Autumn

The Jackson Park Highlands District is a historic district
in the South Shore community area of Chicago, Illinois.
The district was built in 1905 by various architects.
It was designated a Chicago Landmark on October 25, 1989.

It is often regarded as one of three South Side
upper-middle to upper-class neighborhoods, the other two
being Hyde Park to the direct north and Beverly, a little
ways southwest.

Boundaries

The neighborhood is roughly bounded by East 67th Street to
the north, East 71st Street to the south, Cregier
(Named for former Chicago mayor) to the west and Euclid
(named for the famed mathematician) to the east.

Directly north of the neighborhood lies the 18-hole Jackson
Park Golf Course, a part of the Chicago Park District’s
Jackson Park, the third largest park in the city and home
of the 1893 Columbian World Exposition.

To the south lies the former Illinois Central Railroad tracks,
now operated by Metra rail’s Electric Line of trains. To the
east lies Jeffrey Boulevard and across that is the larger
neighborhood of South Shore.

HISTORY

The neighborhood was commissioned in the early 20th century.
Its initial purpose was as a collection of model homes that
would overlook the prized Jackson Park, which had hosted the
World’s Fair less than a decade prior. The neighborhood
featured (and is still present) some of the most innovative
concepts of the time, including large front yard setbacks,
50-foot lot widths, underground utilities, and no alleys.

When Chicago annexed Hyde Park just in time for the 1890 census
(to beat out Philadelphia as the second largest metro-area in
the nation), the Highlands were left under governorship of the
South Shore area.

At the time of the Second World War, the neighborhood saw huge
loss in residence and a destruction of the area was suggested.
With the arrival of the 1970s, the neighborhood again began
to rise as a major thoroughfare of South Side luxury.

It was designated a Chicago Landmark on October 25, 1989.
Houses now range from the $200,00 mark upwards to about $1.5 million.

REAL ESTATE VALUES IN JACKSON PARK HIGHLANDS (CHICAGO)

As of January 22, 2017 there is 1 single family homes on the market
in the Jackson Park Highlands neighborhood. The asking price
is $499,900. The average asking price per square foot is about $106.

JACKSON PARK HIGHLANDS MAP

Jackson Park Highlands - Chicago - Map

If you have any questions regarding real estate in the Jackson Park Highlands,
please let me know!

Until the next time,

Mark Killion
Kale Realty
2447 N. Ashland
Chicago, IL 60614

Office: 312-939-5253
Cell: 773-354-6693

Send me a note!

Visit me online: www.773property.com

EQUAL HOUSING OPPORTUNITY

Some of the above information was taken from
the Wikipedia page on Jackson Park Highlands.
For the original Wikipedia article, visit:

http://en.wikipedia.org/wiki/Jackson_Park_Highlands_District

Bronzeville Real Estate Sales Analysis – Chicago 2016

Until the next time,

Mark Killion
Kale Realty
2447 N. Ashland
Chicago, IL 60614

Office: 312-939-5253
Cell: 773-354-6693

Send me a note!

Visit me online: www.773property.com

EQUAL HOUSING OPPORTUNITY

Due to strong rental demand in the area, owning a condo may even be cheaper than paying rent.
The average selling price for a 2bed/2bath condo, in 2016, is about $91,000.
The average selling price for 3 bedroom condo, with 2 baths, is about $143,000.

As of 12/3/2016, there are 17 3bed/2bath condos on the market for sale in Bronzeville.
The median asking price is $154,000.

As of 12/3/2016, there are only 7 2bed/2bath condos on the market for sale in Bronzeville.
The median asking price is $160,000.

If you are thinking about buying or selling a condo in Bronzeville, let me know!
You can text me: Mark Killion 773-354-6693.

Bronzeville 3bed/2bath condo sales analysis – Chicago

Until the next time,

Kale Realty
2447 N. Ashland
Chicago, IL 60614

Office: 312-939-5253
Cell: 773-354-6693

Send me a note!

Visit me online: www.773property.com

EQUAL HOUSING OPPORTUNITY

A Bronzeville Investment property that recently sold for $375,000

Available Bronzeville Investment Properties

Let’s look at buying an investment property in the Bronzeville neighborhood.
We will focus on Two-to-Four Unit investment properties.
I like to analyze properties that are fairly turn-key investments.
This means that the units are in decent condition and they are already rented out.

Of course, you can find fixer upper properties that are not yet rented.
But those are harder to analyze, because there are so many unknowns
(i.e. cost of repairs, building permits, length of time to find tenants, etc).

It is nice to see that the Bronzeville real estate market is alive and well.
Bronzeville usually has a limited supply of available investment properties.
I would say that the demand for quality investments far exceeds the supply.

Owners of Bronzeville properties tend to hold on to them for long periods of time.
So the turnover of properties in Bronzeville is lower than in some other neighborhoods.
But, I found 5 recent comps for this analysis, so this will give us a good idea of
the current market.

Here are the details of the 5 investment properties:

1) Price: $390,000 .. (4 units – 14 beds)..Gross Income: $57,084.. GIM: 6.83
2) Price: $380,000 .. (3 units – 11 beds)..Gross Income: $54,960.. GIM: 6.91
3) Price: $375,000 .. (4 units – 11 beds)..Gross Income: $52,500.. GIM: 7.14
4) Price: $331,000 .. (3 units – 8 beds) ..Gross Income: $37,620.. GIM: 8.80
5) Price: $317,000 .. (2 units – 7 beds) ..Gross Income: $32,400.. GIM: 9.78

Property #3 is right in the middle and it represents a typical Bronzeville
investment property. Property #3 will be the subject of this analysis.
Now let’s dig into the numbers:

Income

This property sold for $375,000. It was fully rented and generating an annual
income of $52,500. Here is the income of each unit:

1) 2bed/2bath $950
2) 3bed/2bath $1,110
3) 3bed/2bath $1,020
4) 3bed/2bath $1,295

Each unit was recently rehabbed with hardwood floors and updated kitchens.
Total monthly income was $4,375.
There is also room to increase rents every year until they are at the market rate.
The current market rate for a rehabbed 3bed/2bath unit in Bronzeville is $1,500.

This building’s “Gross Income Multiplier” was a little over 7.
This just means that if you multiply the annual rental income by 7,
you will arrive close to the selling price. So right away, we have
a good metric to use when searching for potential properties in Bronzeville.
This metric is also known as the GRM (Gross Rental Multiplier).

This is also a useful metric if you are thinking about selling and you own a
4 unit property in Bronzeville. Multiply your annual rental income by 7 and
that will be a good estimate of its current market value.

Expenses

Now let’s dig a little deeper and analyze estimated annual expenses:

Property Management: $5,250
Repairs: $3,750
Taxes: $3,600
Vacancy: $2,625
Collections: $2,625
Insurance: $2,000
Water Bill: $1,500
Landscaping: $1,200
===============================
Total Annual Expenses: $22,550

So our estimated annual expenses come to $22,550. This is about 43% of our
Gross Income. I think typical expenses for this type of property will run you
between 40% and 50%.
So our estimate looks pretty good.

To get our Net Income, we just subtract expenses from our gross income.
Net Income = $29,950

Cap Rate

Using our Net Income, we can calculate our “Cap Rate”. Cap Rate, short
for capitalization rate, is defined as [Net Income] divided by [purchase price].
So using this formula, we find that our Cap Rate for this property is 8%.
You may see the term “Cap Rate” quite a bit when you start looking for investment properties.
It gives you a way to compare different investment opportunities.
But it is just a “rule of thumb” metric that will help filter out bad investments.
One thing that has a huge impact on the “Cap Rate” is the amount of expenses.

If the owner is understating the expenses, it can skew the Cap Rate and
make it look higher. On the other hand, if the owner had a huge one time
expense last year (replaced the boiler), it can make the Cap Rate look lower.
When you are doing your analysis, if you estimate expenses at about 40%,
I think you will be OK.

In Bronzeville, most of the good investment properties will have a Cap Rate of about 8%.
Some will be higher, some will be lower. But the average Cap Rate in Bronzeville is about
8% to 9%. In other neighborhods where purchase prices are higher, the cap rates will be lower.
Hyde Park is a great example. Cap rates in Hyde Park are about 6%.
OK… enough about Cap Rates, let’s continue.

Cash Flow

So now we have about $30,000 in annual net income.
That is decent income for one property, but how much cash flow will be generated?
What is cash flow you say? Cash flow is what goes in your pocket!
It is your Net Income minus your mortgage payments (debt service).
If you bought the property in cash, then obviously your Net Income is your cash flow.
But most investors will use a mortgage when purchasing a property.

SCENARIO #1

So if we get a conventional loan and put down 20% ($75,000), our monthly payment will
be about $1,520. This assumes the loan had a 4.5% APR.
Once we subtract the mortgage from our monthly net income, we are left with
$976 every month. This means our annual cash flow is $11,710.

This may not sound like a lot of cash flow for a $375,000 property, but remember,
we financed this property.
Our actual cash invested in this property is $75,000 plus closing costs.
If we figure closing costs to be about $4,000, then our
cash-on-cash return on investment (ROI) is 14.8%.

That is pretty good considering Bank of America is currently only paying
.07% interest for a CD.
To put that in perspective, our $75,000 would only earn a measley $52 per year.
That is $52 per year vs $11,710 per year!
Of course, CDs are easier to manage. They don’t stop up the toilet or lock
themselves out at 2 AM. But we are paying $5,250 per year for a property manager.
That way we don’t have to deal with any tenant issues directly.

SCENARIO #2

Another option when buying this type of property would be to live in one of the units,
and rent out the rest. If you take this option, you can qualify for a FHA insured loan.
FHA loans only require a 3.5% down payment. In this case, that would come to $13,125.
Of course, the property’s annual income, and cash flow, would drop because you are
living in one of the units. But you would be living rent free. So saving $1,000 per
month on rent has the same impact on your finances as having $1,000 monthly cash flow.
This is the ideal situation for a 1st time investor. Let the tenants pay off your
mortgage and help you build equity over time.

Well that is enough number crunching for now.
I hope you found this information useful.
If you are thinking about buying or selling an investment property in Bronzeville,
please send me a note: mark@markkillion.com

Bronzeville

Available Bronzeville Investment Properties

Until the next time,

Mark Killion
Kale Realty
542 W. Roosevelt Rd
Chicago, IL 60607

Send me a note!

Visit me online: www.773property.com

EQUAL HOUSING OPPORTUNITY

Bronzeville Real Estate Analysis

Bronzeville Condos – Selling Price of a 3bed/2bath Condo

It might also be useful information if you were thinking about opening a business. A strong real estate market is a key indicator that the overall economy is doing well. We find that when the real estate market is doing well, customer sentiment is generally high.

And as we all know (thanks to the recession), the converse is also true.
When the real estate market is suffering, customer sentiment usually plunges.

To really benefit from real estate analysis, you need to look at data on the neighborhood level. We have all heard, that in real estate, location is everything. This is very true. Real estate prices can vary
wildly from neighborhood to neighborhood.

So for this analysis, I decided to focus on Bronzeville Chicago.
Bronzeville Chicago has a lot going for it. There are many great neighborhood amenities including restaurants, parks, the lake, etc.

I was curious if the Bronzeville market conditions were improving or declining.
So I decided to analyze all condo sales dating back to 2007.
This information was extracted from the MRED MLS system.

The graph shown below shows the average selling prices by year.

bronzeville_real_estate_average_sales

We see that the average selling price hit a bottom around 2011. Since 2011, prices have been steadily increasing.
That is a good sign. Rising prices equates to rising demand.
We also see that prices have fallen significantly since 2007.

The pie charts shown below examine the ratio of traditional sales to distressed sales. We can see that foreclosures still make up half of the market in Bronzeville.

bronzeville_pie_charts_foreclosures

The following chart looks at the total units sold by year.
It looks like 2014 will end up with less units sold than in 2013.

bronzeville_sales_by_year

Well, that is all for now. If anyone out there is still awake, please leave
me a comment. Thanks!

Until the next time,

Mark Killion
Kale Realty
542 W. Roosevelt Rd
Chicago, IL 60607

Send me a note!

Visit me online: www.773property.com

EQUAL HOUSING OPPORTUNITY