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Author: Mark Ainely | Partner GC Realty & Development & Co-Host Straight Up Chicago Investor Podcast
Welcome to another Straight Up Chicago Investor Podcast!
In this episode, we bring back Corey Oliver, founder of Strength in Management, to dive deep into the current challenges and evolving opportunities of investing and operating in Chicago’s most underserved neighborhoods. Managing nearly 700 units on the South and West sides of Chicago, Corey offers a candid, boots-on-the-ground perspective on how to build resilient rental portfolios in communities often overlooked by traditional investors.
This is Corey’s second time on the show (his first was Episode 176), and today, he opens up about how the past two years have impacted his business—from restructuring operations and exiting underperforming assets, to preparing for a new wave of affordable development in areas like Woodlawn.
If you’re a Chicago landlord, aspiring developer, or property manager looking for strategies to navigate high-vacancy, high-touch areas, this episode is packed with real talk and invaluable insight.
Questions We Answer in This Show
Q: What’s the #1 mistake new investors make when buying in tough Chicago neighborhoods?
A: Overpaying. Corey stresses that no amount of good property management can rescue a deal that starts off with a bad acquisition. Always build your pro forma with realistic expenses, conservative rents, and worst-case assumptions.
Q: What does a proper cap rate look like in areas like North Lawndale?
A: A real 10-11% cap rate, using accurate vacancy and expense numbers. Not a “broker 12%.” Investors who use artificially low expense ratios are often shocked by the reality of operations.
Q: How should landlords prepare for volatility in subsidies and public support?
A: Don’t rely on subsidies. Budget for 15-25% vacancy and collection loss, and stay informed about shifts in HUD and CHA funding, including cuts that impact rent guarantees.
Q: Why do some Chicago landlords exit neighborhoods like North Lawndale and Englewood?
A: When bad policy, unreliable tenants, and underperforming assets stack up, some landlords divest rather than go down with the ship. Corey shares how they strategically exited the West Side to focus on new opportunities.
Q: What’s the challenge of managing CHA (Section 8) units in Chicago?
A: Time. It can take 75-90 days for a unit turnover due to CHA delays. Corey recommends landlords plan for long lead times, track tenants’ re-certifications, and understand how fair market rents affect voucher income.
Q: How can out-of-state investors protect themselves when buying in Chicago?
A: Corey urges all remote investors to fly in, walk the property, talk to tenants, and analyze the neighborhood at different times of day. Don’t rely solely on spreadsheets or seller-broker narratives.
Q: What operating expense ratios should investors assume in these areas?
A: Boiler buildings: 40-45% OPEX after vacancy and collection loss. Forced air: 35-38%. Lower than this is wishful thinking.
Q: What’s the real impact of tenant quality in high-touch neighborhoods?
A: Miss on one tenant and you’re out $25K or more between nonpayment, court costs, and unit damage. The margin for error is razor thin, especially when subsidies dry up or tenants go missing.
Q: What’s one tip for managing expectations with new property owners in these areas?
A: Be brutally honest about turnover costs, CHA timelines, tenant quality, and maintenance expenses. Some owners need to hear hard truths before they burn out.
Q: How can smaller developers tap into city incentives for affordable housing?
A: Corey shares his journey applying for $37M in funding for a mixed-use development in Woodlawn. He breaks down how to work with IDA, the City of Chicago, and syndicators on Low Income Housing Tax Credit (LIHTC) deals.
Core Topics Discussed
Why Overpaying Kills Deals in Chicago: "You can’t operate your way out of a bad acquisition." Corey emphasizes how unrealistic pro formas, lowball maintenance assumptions, and buying based on comps instead of reality leads to disaster. You need honest numbers, especially in volatile areas.
How to Manage CHA Units Like a Pro: Corey walks through timelines, voucher re-certifications, mobility zones, and rent increase strategies. He breaks down how to document upgrades, advocate for fair rent adjustments, and why having relationships at CHA can speed up approvals.
Section 8 Realities for Chicago Landlords: With CHA delays stretching 75+ days and new rules around voucher cancellations, Corey warns landlords to rethink their reliance on subsidies. One missed tenant screening can cost tens of thousands in repairs, lost rent, and mental stress.
The Human Side of Property Management: This isn’t just about spreadsheets. Corey shares stories of elderly tenants on fixed income, turnover delays, squatter issues, and the emotional balance between doing right by residents and making smart business decisions.
Affordable Housing Development: Corey’s New Woodlawn Project: Corey opens up about his $37M affordable housing project in Woodlawn, backed by city funding and LIHTC support. The mixed-use development will include 48 units, an urgent care, and a brand new laundromat. He gives a behind-the-scenes look at the application grind, timeline, and lessons learned.
Show Notes
02:32 Housing Provider Tip: Be cautious with hydro jetting on old pipes
04:07 Corey’s management history and restructuring strategy
06:28 Why they exited North Lawndale and parts of the South Side
08:52 Understanding cap rates, real-world OPEX, and market conditions
13:20 The realities of subsidy volatility and CHA risk
17:44 Managing CHA tenants vs market tenants: real cost and wear
22:40 Section 8 delays and red tape: what landlords must prepare for
29:03 CHA mobility programs and rent bonus incentives explained
34:48 Coaching out-of-state investors on due diligence
43:10 Corey’s $37M Woodlawn affordable housing development journey
Guest Info
Guest Name: Corey Oliver
Guest Company: Strength in Management
Connect: LinkedIn
Because finding good tenants and property management shouldn’t feel like online dating.
Dear Investor,
If you are an investor in either the city or suburbs of Chicago, I would love to speak with you about how we can help you on your real estate journey. At GC Realty & Development LLC we help hundreds of Chicagoland real estate owners and brokers each year manage their assets with both full service property management and tenant placement services.
We understand that every investor’s goals are unique and we love learning about each client’s individual needs. If there is an opportunity to help you buy back your time by managing your rental property or finding quality tenants, please check us out.
Best Investing,
Founder, Partner, Podcast Co-Host, and Investor
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