Series: Getting started with Chicago Investment Property. Part 1

A client purchased her first investment condominium this week. Besides helping her as her identify and purchase her property, I will be getting her started on her way becoming a responsible landlord. Since I have to create these materials on her behalf, I though the topic would make a great series of blog posts.

Phase 1: Identifying your potential investment property.

Get together with your real estate pro. May I suggest ->me<-? You should have a lengthy discussion about kinds of properties, goals and objectives, and finally your finances.

Kinds of properties: Would you like to own a two, three or four flat? Will you live in it? Would you prefer a condominium? Do you want one that you can fix up and sell for a profit? Or one that's already in good condition? Or do you want to find a larger building with six, a dozen, or even more units?

Goals and objectives: Will you buy and hold? Or buy, fix and flip? Are you betting on appreciation? Or do you need the property to cash flow? Do you need to shelter other income?

Finances: How much money are you putting down? Have you spoken to a bank yet? Do you know what interest rates are on investments? Are you aware of making exchanges? How's your insurance? What's your tolerance for risk?

After answering all these questions, you should then begin looking. This step can take a day or many months depending on your unique needs. I have a great checklist of steps to take in order to get comfortable selecting a property and making an offer. It's several pages - too much to share here. Give a call if you'd like to receive this; it's part of my investment handbook.

After you identify your desired property, you'll write a contract on it. You'll negotiate out your terms and your price, and if you're successful, you'll be under contract. But the process isn't over yet.

Take the time to do your discovery, or due diligence. For a condominium, you'll be given all the condominium documents. For a multi-unit building, you'll be given copies of all the leases, reports about expenses and copies of some of the bills.

Another part of your due diligence is to have an inspection.

If this all goes well, you'll be well on your way to closing on your investment property. Your attorney will handle most of the details and you'll be given instructions on when and where to go for closing, and how much more money to bring.

Before Phase 1 ends, however, it's wise to begin implementing Phase 2: Marketing your condominium or apartments for rent. Stay tuned for tomorrow's installment.

Guide to articles

Part 1: Identifying potential property
Part 2: Marketing
Part 3: Taking an application and lease
Part 4: Move in day