This analysis models a typical BRRRR project in South Chicago at the neighborhood median ARV of $175K. Real-world projects vary substantially based on property type, condition, and submarket dynamics.
Acquisition and rehab assumptions
| Acquisition price (85% of median) | $98K |
|---|---|
| Rehab budget (midpoint) | $100K |
| All-in cost | $198K |
| After-Repair Value (ARV) | $175K |
Monthly cash flow model
| Estimated monthly rent | $1K |
|---|---|
| Property tax (Cook County investor classification) | −$365 |
| Insurance | −$73 |
| Vacancy reserve (7%) | −$104 |
| Property management (8%) | −$119 |
| Maintenance reserve (6%) | −$89 |
| Net Operating Income (monthly) | $738 |
| DSCR refi at 75% LTV / 7.5% / 30yr | $131K loan, $918 P&I |
| Monthly cash flow after debt service | $-180 |
| Cash left in deal after refinance | $67K |
What this tells us about South Chicago
At the South Chicago median, a typical BRRRR project produces approximately $-180 per month in cash flow after a 75% LTV DSCR refinance. With approximately $67K remaining in the deal after refinance, this represents a -3% cash-on-cash return on the remaining capital — before appreciation.
South Chicago is deep-value territory. Section 8 rentals work; appreciation is slow. Best for cash-flow-focused operators with patience. Steel mill legacy environmental considerations matter — check for industrial-site adjacency.
How this scales across South Chicago
South Chicago's housing stock includes workers cottage, 2-flat, bungalow, small multi-unit. Multi-unit properties (2-flat, 3-flat) typically produce 30–60% higher gross rent than single-family at similar ARVs but carry higher tax burdens and management overhead. Single-family rehabs often have stronger exit liquidity (owner-occupant buyers) but lower cash flow.
Sensitivity considerations
- Rent assumption: Modeled at ~0.85% of ARV. Actual rents in South Chicago range from 0.6–1.0% depending on property type and condition.
- Property tax: Modeled at 2.5% of ARV for Cook County investor classification. Successful tax appeal can reduce this 15–30%.
- Interest rate: DSCR refi rates currently range 7.5–9.5% depending on borrower profile and leverage. A 1% rate change moves monthly cash flow by approximately $100–200 on this deal size.
- Rehab budget: Modeled at midpoint of $50K–$150K. Common considerations on South Chicago housing stock (vacancy damage, aging mechanicals) can push budgets higher.
South Chicago cash flow FAQ
Estimated monthly rent for a stabilized investment property in South Chicago at the $175K median ARV level is approximately $1K per month — a rough rule-of-thumb estimate at ~0.85% of ARV. Actual rents vary significantly by property type (workers cottage, 2-flat, bungalow, small multi-unit) and condition.
On these estimates, a typical BRRRR project at the South Chicago median ARV produces approximately $-180 per month in cash flow after debt service (at 75% LTV DSCR refi, 7.5% rate, 30-year amortization). Cash left in the deal after refinance: $67K. Individual deals vary substantially.
For a property in South Chicago valued at the median ARV of $175K, expect approximately $4K in annual property tax (Cook County investor-classification, before exemptions and appeals). Chicago city properties were reassessed in 2024 — many neighborhoods saw material assessment increases.
South Chicago typically supports a rent-to-price ratio in the 0.6%-0.9% range depending on property type and condition. Multi-unit properties (2-flat, 3-flat) generally produce higher ratios than single-family. The 1% rule rarely applies in Chicago neighborhoods — but BRRRR works at lower ratios when appreciation supports it.
This is a directional cash-flow model, not personalized financial advice. Rent estimates, tax rates, and refinance terms are illustrative. Validate every assumption with current market data and your own underwriting before committing capital.