Chicago Multi-Unit Investor Guide

Investing in Chicago multi-units is about disciplined underwriting, clean operations, and respect for local rules. This playbook covers the essentials for 1–8 unit properties across the city.

Define your investment thesis and non-negotiables

Start with clarity so every deal ladders up to the outcome.

Primary objective: long-term hold, value-add, BRRRR, or medium-term furnished

Return targets: cap rate, cash-on-cash, IRR, DSCR thresholds

Constraints: max rehab budget, preferred neighborhoods, target unit mix, timeline

Deal breakers: illegal units, weak structure/masonry, chronic water intrusion, uninsurable conditions

We capture this in a short intake form so sourcing and underwriting match your criteria.

Financing by unit count (and how it changes your play)

1–4 units: typically underwritten like residential; rates and terms align with primary/second home or investment property loans. Owner-occupant options exist for 2–4 units with low down payment.

5–8 units: generally commercial multifamily terms; underwriting leans on in-place/stabilized NOI and DSCR, with different covenants, prepayment, and closing timelines.

Practical takeaway: your capital stack and rehab scope should match the loan type and the lender’s stabilization timeline.

Neighborhood and asset selection

Target micro-areas where rent drivers are durable: transit access, employer nodes, hospital/education anchors, and livability factors like parks and retail corridors. For asset type, align to your plan:

• Brick 2–4 flats: classic value-add, watch tuckpointing, lintels, parapets.

• Frame buildings: inspect siding, flashing, and porches closely.

• 5–8 unit walk-ups: scale efficiency, shared systems risk goes up.

Underwriting that holds up in Chicago

Build the pro forma from the bottom up.

Income: realistic rent comps by unit type and finish; confirm rent control status doesn’t apply; account for parking, laundry, storage.

Vacancy & credit loss: use conservative vacancy based on submarket and seasonality.

Expenses: taxes, insurance, water/sewer, scavenger, common electric/gas, snow/lawn, pest, property management, maintenance, admin. Model utilities by system type: boiler vs individual furnaces.

CapEx: roof, masonry/tuckpointing, porches, windows, sewer, electrical service, HVAC replacements, water heaters, lead service lines. Schedule reserves.

Sensitivity: run DSCR and cash flow at today’s rates and a modest rate shock; stress test taxes and insurance.

Building diligence: Chicago small-multi specifics

This is where you protect the downside.

• Structure & envelope: foundation settlement, parapet walls, lintels, brick spalling, mortar condition, roof age and drainage.

• Porches: code compliance and load; common point of failure.

• Mechanical systems: boiler age/efficiency, distribution piping, or GFA furnaces per unit; electrical panels and service size; common area ventilation.

• Plumbing & sewer: galvanized vs copper, sewer scope for bellies/tree roots; check for seepage and past flood control installations.

• Utilities: verify separate meters vs house meters; understand how common utilities hit NOI.

• Unit legality: confirm the count matches records; review garden/basement units for egress, ceiling height, damp proofing, and permits.

Legal and compliance checkpoints

• Leases and ordinances: Chicago has specific landlord-tenant requirements affecting disclosures, fees vs deposits, notices, and remedies. Structure leases and onboarding to comply.

• Licensing/registrations: ensure any required registrations and inspections are current for the property type and unit count.

• Fair housing and screening: align criteria with applicable rules; document processes.

• Condo/HOA context (if deconverted or part of an association): verify docs, budgets, reserves, special assessments, and rules affecting rentals.

We coordinate with your attorney to keep documents, notices, and disclosures correct and on schedule.

Value-add playbook that actually moves NOI

• Unit turns: durable finishes, lighting, hardware, and functional storage.

• Layout wins: add closets, in-unit laundry where feasible, or reconfigure odd kitchens.

• Ancillary income: parking, storage cages, bike storage, pet fees where allowed, premium for renovated finishes.

• Common-area upgrades: lighting, paint, mail/package setup, secure entry.

• Systems: convert to individual utilities if the ROI pencils; weatherize to cut common gas/electric.

Rules change, and not all upgrades are permitted everywhere. We verify feasibility before you budget.

Operations: simple, documented, repeatable

• Leasing & marketing: high-quality media, accurate rent positioning, clear pet and parking policies.

• Screening: consistent criteria and documentation.

• Rent collection & bookkeeping: standardized systems and monthly reporting.

• Maintenance: preventive schedules for roofs, boilers/furnaces, drains, and porches; vendor bench for rapid response.

• Tenant experience: clear communications reduce churn and delinquency.

Exit strategy from day one

Decide how you’ll realize returns: refinance after stabilization, hold for yield with periodic tax appeals and capex cycles, or sell into peak season with strong trailing financials. Keep clean books and documented upgrades to support valuation.

Chicago-specific considerations

• Property taxes: reassessment cycles and appeals can materially impact NOI; model forward, not just last year’s bill.

• Seasonality: leasing velocity and rent levels vary by season; plan turnovers accordingly.

• Weather: freeze-thaw drives masonry and porch issues; budget for ongoing tuckpointing and roof maintenance.

• Transit & noise: proximity boosts demand but can hurt certain lines/tiers; evaluate exposure and glazing.

• Alley realities: trash, snow, and rodents are operational line items, not afterthoughts.

Who benefits most from this approach

Investors who value structured underwriting, operational discipline, and compliance done right across 1–8 unit assets.

Frequent pitfalls we help avoid

• Buying illegal or non-conforming units

• Underestimating taxes, insurance, or common utilities

• Ignoring roof, masonry, or sewer issues

• Assuming rent bumps without verifiable comps

• Mis-matching financing to the business plan and timeline

Next steps

• Book a 15-minute investor strategy call to align thesis, target submarkets, and return metrics.

• Complete our Investor Discovery Form so we can source deals that match your criteria.

• Review a sample underwriting package with rent comps, expense model, and capex schedule.

• Get curated on- and off-market opportunities across 1–8 unit assets.

At Mynt Properties, the objective is simple: reduce noise, protect you from risk, and help you buy the right investment with confidence.