Are 2-Flats Still a Thing? 1732 N. Hudson in Old Town
This 2-flat at 1732 N. Hudson in Old Town came on the market in January 2019.
Built in 1876, there’s a 3-bedroom duplex up unit on the second and third floor and a 1-bedroom apartment on the first floor.
The listing says there’s been a “complete renovation” of the building.
The 3-bedroom duplex up “owner’s unit” has a living room with custom built-ins.
The kitchen has white cabinets, granite counter tops and GE Café series stainless steel appliances.
All three bedrooms are on the second floor, including the master suite which has its own attached bath.
The 1-bedroom apartment has what looks like concrete floors.
The kitchen has dark cabinets, stone counter tops and stainless steel appliances.
Both units have central air and, it appears, washer/dryers (the duplex up definitely shows one on the floor plan.)
There’s no parking but the listing says there is “EXTREMELY easy street parking (due to the one way streets).”
Originally listed in January 2019 for $1,495,000, it has been reduced to $1,399,000.
No rents are listed in the public listing.
Do 2-flats still make sense for owners to buy one and rent out the other?
Colin Hebson at Dream Town has the listing. See the pictures and floor plan here.
1732 N. Hudson: 2-flat, 4 bedrooms, 3.5 baths
- Sold in December 1999 for $450,000
- Sold in July 2008 for $615,000
- Sold in October 2015 for $1,237,500
- Originally listed in January 2019 for $1,495,000
- Reduced
- Currently listed at $1,399,000
- Taxes of $13,113
- Unit #1: 1 bedroom, 1 bath (first floor)
- Unit #2: 3 bedrooms, 2.5 baths (second/third floors)
- Central Air
- Washer/dryer in each unit
- No parking
- No rents listed
Cap rate. Need to find out the rents for 1 br and 3 br/2.5 bh before deciding on the price. Can’t imagine covering taxes, let alone 1.5x taxes, with a 1 br with concrete floors. Stick the mother in law down there, or boomerang kid, I suppose.
Interesting place. Maybe consider converting to single family if renting isn’t financially realistic, per johnc’s comment above.
Unfortunately, I believe there are more charming townhomes available in Lincoln Park for this price, some of which have parking. This one has a really modern feel, and if there was any old-time charm it’s long gone.
“Do 2-flats still make sense for owners to buy one and rent out the other?”
Yeah, we still see people doing it if a) one of the units is nice enough for the owner and b) the cap rate is high enough that you get a good return on the rented unit and the effective cost of the owner unit is low enough.
And you never know what “nice enough” is for the owner. Usually it’s the nicest unit in the building but occasionally we see special circumstances – e.g. father is going to buy the building and put his daughter in the cheaper unit.
To me, this only makes sense if you “need” that 2d unit in the same building. You can find a comparable duplex condo + nearby 1/1 for considerably less total outlay.
Who wants to spend $1.4m (in Chicago) and deal with landlording one small unit in your own building?
“Do 2-flats still make sense for owners to buy one and rent out the other?”
Hell yes. Maybe not to cash flow but to certainly help offset the carrying costs by over half. A lot of my married friends are in the market for these types of 2-4 unit properties. There are attractive FHA and Fannie Mae lending options for owner-occupied multifamily that allow you to (partially) qualify for the mortgage based on what the expected or existing rents are. The problem is there aren’t many of these properties on the market as so many get deconverted to single family homes so effortlessly. Yet trying to build out or legalize a non-conforming basement unit requires $6000 for a zoning change, public meetings, certified mail notifications, etc. Absurdity, Chicago politics, and nimbyism at its finest.
My wife and I bought a two flat last year on the NW side and live in the “crappier” unit and AirBnb the nicer unit downstairs. It’s been really fun and helps out a lot with our monthly nut.
This particular property is very nice but for 1.4mm there are much better, higher CAP rate multifam in the ’14 zip code without the turnkey finishes. I would much rather spend less for a four-banger property like this: https://www.redfin.com/IL/Chicago/1044-W-Montana-St-60614/home/13360233
which has 4 units (plus one non-conforming). Shout out to Gary Lucido for marketing & selling said property!
I have a walk out basement separate unit that I’m planning on airbnbing out after a small updating (new floors, some more can lights installed, new paint). If I get fully booked for the month I basically am covering 85% of my monthly mortgage which is amazing.
I would imagine having a home in a desirable neighborhood like old town and airbnbing would be a great idea
Sonies,
You’d be surprised about how much location or neighborhood isn’t a big factor among many Airbnb guests. I’m seeing 85%+ occupancy through September in Jefferson Park; which is literally one of the most banal hoods in Chicago. I feel like most of the foreigners who are traveling to Chicago are looking at value more than location. The two main attractions I’m asked about are Wrigley Field and Navy Pier and even when I tell potential guests that we’re a 25 minute and 50 minute drive from both (respectively), most will still book. Being a 3bed we do attract more families so they could be valuing different things — like quiet/safe neighborhood, easy parking, close to ORD — than what younger travelers/couples may want: neighborhood action, amenities within walking distance, instagram-able street murals, etc.
wow that is incredible! Personally I can’t wait to get this going to see how it does
(plus one non-conforming).
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Stay away from non-conforming. Building Department gets wind and you’ve got a $500 a day violation.
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If I get fully booked for the month. . .
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Fully booked is not going to happen. Even Wrigley in the Summer is lucky to get sixty-five percent, and your cleaning-between-renters costs will put a big dent in your take.
“Fully booked is not going to happen. Even Wrigley in the Summer is lucky to get sixty-five percent, and your cleaning-between-renters costs will put a big dent in your take.”
What an ignorant statement. Why offer an opinion on something you know nothing about?
The long term rental in my 3 flat does 65% of mortgage, taxes, insurances. My short term rental *averages* a *net* of 82% of M-T-I. I can do 98% occupancy 6 months a year, and about 90% occupancy the other 6 in a non-prime area.
Are multi-units still a thing? The only question I ask is why condos are still a thing for anyone who cares at all about wealth-building?
“Fully booked is not going to happen. Even Wrigley in the Summer is lucky to get sixty-five percent, and your cleaning-between-renters costs will put a big dent in your take.”
you can charge people a cleaning fee, and it doesn’t sound like you’d be lucky to get 65% anymore
Sixty-five percent occupancy, not 65 percent of financials
“you can charge people a cleaning fee”
Any Airbnb that doesn’t charge a cleaning fee is seriously suspect. I would not stay in one that doesn’t charge a fee, as I would assume that it was gross.