Investing in South Loop Real Estate in Chicago is today's focus on part two of our three-part series titled -- "How to Take Advantage of Today's Market". The second best way to take advantage of the current buyer's market in Chicago. It has always confused me that in the heat of the seller's market from (2003-2007) when prices were high, inventory was low, and cash flow opportunites were low; everyone wanted to invest in real estate. However, in the buyer's market (2008-present) when prices are low, rates are even lower, inventory is high (which means more options), and cash flow opportunities are tempting; many buyer's are scared to enter the market. Fear is contagious and well-meaning friends and family can deter you from making the best investment of your lifetime.
Ask any succesful investor, and they will tell you -- "buy when no one else is buying". Also, the lending guidelines for investment properties are tighter than the guidelines for residential properties. Which means that there a fewer people who can invest in real estate; which is great for those who can. Think of it this way, in 2005 there were probably 5 buyers for every 4 properties on the market; which of course drove prices up. Now, there are probably 10 properties for every 1 buyer; driving the cost of real estate down.
Here are a few more advantages:
1.) Invest with OPM (Other People's Money) -- you can acquire a property in the South Loop with a 10-20% down payment; and the bank will take on the majority of the risk. Name another investment that allows the investor to defer 80% of the risk with someone else.
2.) Cash flow (aka cash in your pocket) is the difference between your total rents and your expenses to maintain the property.
3.) Tax deductions - the mortgage interest that is paid by your tenants is deductible on YOUR taxes. It almost doesn't seem fair: the bank took the majority of the risk, the tenant pays your mortgage, and you (not the tenant) get the tax deduction!
A great resource that I have personally read that is the perfect blueprint for how to invest in real estate. It's called the Millionaire Real Estate Investor by Gary Keller (founder of Keller-Williams International). In this amazing book Keller interviews investors who thru different mediums have netted $1 Million in real estate in one year. You maybe thinking, "Maurice, I don't want to make millions in real estate"; that's great! The best thing about real estate is that you can choose to have one simple rental unit, a 32-unit multi-family dwelling, or major office complex.
Yet another advantage of real estate is the opportunity for equity build-up. Even though we may be in a down market; over time real estate will always increase in value. The simple reason? As humands, we have three basic needs (that have been the same since the beginning of time): 1.) Food 2.) Water 3.) Shelter. Investing in South Loop Real estate in Chicago is a no-brainer. If you have the opportunity to invest -- DO IT -- and have one-less "woulda--shoulda--coulda" in your life!!
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