I personally know a large number of Chicago real estate investors who got started with a three flat as their first investment.  Three flats tend to be very safe initial investments as they are easy to rent and tend to have smaller operating costs.  However with that being said, it is very difficult for many to get started this way due to the sizable down payment required.

What if I told you there is an easier way to get started in real estate investing?  The idea is simple; buy a condo with two or more bedrooms.  You can live in one bedroom and rent out the others.  Think about it; you will apply this rental income towards your taxes and mortgage plus save a portion.

Say you collect and save on average $600 per month over a three year period from your renters.  At the end of three years you will have accumulated $21,600 from your renters.  This amount equates to a 5% down payment on a $432,000 Chicago three flat.  You now can control a nice brick three flat using 100% Other People’s Money (OPM).  You will have your 5% down payment from the renters and 95% from the bank loan. 

I know this strategy is not for everyone, but I think it will work great for many.   Either way, take control of your future by owning real estate.

Many smart people have told me through the years that contrarians make money by buying in bad markets.  As it stands right now, those that are currently purchasing real estate are definitely in this class.  I think a lot  of smart people are buying right now; however, I don’t feel that many of these people are first time buyers.

Chicago first time home buyers please note that you should not be scared of this real estate market.  Why do I say this?  Prices have dropped overall, but many local experts feel the bottom is here so lock in a great price by buying now.  Chicago landlords are raising rents $100 to $300 per unit per month making renting much more expensive.  Further the U.S. government is offering first time buyers a $7,500 credit towards your next Federal tax bill.  This benefit won’t be extended forever.

The bottom line is to challenge yourself to consider buying now by being a contrarian.  Buying when everybody else is buying tends to be a losing proposition.