Two-flats in Albany Park, Portage Park, South Shore, and Washington Heights

Photography: (Portage Park building) Courtesy of Redfin; (all others) Courtesy of Baird & Warner

Clockwise from top left: Two-flats in Albany Park, Portage Park, Washington Heights, and South Shore

Q: I am a 28-year-old single resident of Chicago (Wicker Park). I am looking to make a real estate investment. My budget is between $100–$200k. Ideally, I’d like to purchase a multi-family property. I understand that, given my budget, I’m probably looking at a residence in a “distressed” area, but hopefully not an area with “systemic” gang-related issues. Is that a practical possibility? Or considering my budget, would you focus on a single-family property? —John

A: Go for the multi-flat, John. You can do pretty well on your budget in this market (I have some examples below), but for a single-property investor like you, buying multiple rentable units is always a better idea if it’s possible.

With two or more rentable units, you gain flexibility in a couple of valuable ways: (1) You divide up the risk somewhat. If one unit is vacant for a stretch of several months, you’re still collecting rent on the other, so you have to pony up less to cover the mortgage. (2) At some point, you might opt to live in one of the units, with rent on the other defraying some of your mortgage cost.

Buying single-family homes for rental is a super-popular investment trend now, but the prospects may tighten up. Earlier this year, Appraisal Research Counselors reported that while 150,000 Chicago-area households converted from homeownership to rental between 2006 and 2011, one-fifth of those were back to homeownership by the end of 2012. That’s still a net gain of 120,000 renters (not to mention newly formed households that rent), but it suggests that renting single-family homes isn’t going to be the cakewalk some investors hope it will be.

Thanks in part to short sales, there are some nice two-flats on the market at the upper end of your price range. There are also some that are lower down in your range, but of course the higher you buy in your range, the better the quality of the property and the neighborhood is likely to be. Because it’s a good idea to start with investment property that’s near your home, I first looked for some good deals within easy each of where you are.

In Albany Park, there’s this handsome vintage brick two-flat. It’s a short sale priced at $190,000; the last time it sold, in 2007, it went for $439,000.

Here’s another brick two-flat that’s at short sale status. The asking price has been reduced to $195,000. It’s in Irving Park, and last sold in 2003, for $395,000.

And in Portage Park, there’s this one at $189,900. Last sold for $430,000 in 2006, it’s being offered in as-is condition, so it would be particularly important to have the place inspected before making an offer.

Farther afield from you, there are even better deals available—but they’re only better deals if you’re prepared to be an attentive landlord for properties that are half an hour or more from your home. Here are some I like that are more distant:

Check out this very distinctive Prairie-style two-flat in South Shore, close by the great Jackson Park Highlands, Jackson Park and other good stuff. It’s a short sale, asking $189,000.

Washington Heights is not a widely known neighborhood; it’s immediately east of Beverly, and this map shows that it’s relatively low on violent crime. There’s a subdivision of new homes going up in the neighborhood; last spring, I wrote about a new developer there re-pricing them more realistically. This large Washington Heights two-flat is priced at $194,900.

I haven’t been inside any of these properties; of course you’ll need to do your own research on them and their surroundings. And this is just a sampling; there are many other two-flats and some three-flats in your price range.

What’s your real estate question? Maybe I can shop for neighborhoods or property types for you, or maybe you’re wondering if you got a good deal. Whatever you want to know on Chicago-area residential real estate, ask me at I answer on alternate Tuesdays.