Chicago Real Estate Education

1. How to Analyze a Chicago Fix-and-Flip

Analyzing a deal in Chicago isn't just about price per square foot. You need to account for specific local variables.

The 70% Rule (With a Chicago Twist)

The standard rule is: (ARV x 70%) - Rehab Costs = Max Offer. However, in competitive neighborhoods like Logan Square or Pilsen, investors often push to 75% or even 80% if the data supports it.

Account for Carrying Costs

• Property Taxes: Cook County taxes are paid in arrears and can be high. Always check the Assessor's website.
• Utilities: Winters are cold. Heating a gut rehab project in January can cost hundreds per month.
• Permit Delays: Add a 2-month buffer for standard plan reviews if you're moving walls.

2. Typical Rehab Scopes & Costs

Chicago housing stock is old. You will encounter lath and plaster, knob and tube wiring, and lead pipes. Here are some rough ballpark costs (for estimation only):

3. key Risk Factors

Crime & Block-by-Block Variance

In neighborhoods like Humboldt Park or Woodlawn, one block can be totally renovated while the next is still transitioning. Drive the block at different times of day.

Zoning & Compliance

Illegal garden units are common. Never assume a basement apartment is legal unless you see a Certificate of Zoning Compliance or verify strictly with code.

4. Financing Your Deal

Successful investors use leverage to scale. Jaken Finance Group specializes in Chicago-area loans.

• Fix & Flip / Bridge: Short-term (12 months), interest-only, funds up to 100% of rehab.
• DSCR (Rental) Loans: 30-year fixed rates based on the property's rental income, not your personal DTI.