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Author: Mark Ainely | Partner GC Realty & Development & Co-Host Straight Up Chicago Investor Podcast
Cash flow in Chicago’s A-class neighborhoods is not impossible.
It just requires a different mindset than chasing the cheapest two-flat on the market.
In this episode, Tom Shallcross and Mark Ainley sit down with David Shifrin, a plastic surgeon and Chicago real estate investor, to talk about how he built a 40-unit portfolio across seven multifamily buildings in Bucktown, Wicker Park, Ukrainian Village, and the Logan Square/Avondale border.
David has been on the podcast before, but this conversation is focused on what his portfolio looks like today, how he has used 1031 exchanges, why he is comfortable tying up more equity in better neighborhoods, how turnkey properties can still create value, and why he prefers buying in areas where he would personally want to live.
The conversation also gets into financing, commercial lending, contractor mistakes, the risk of doing business with family, internal property management, building reserves, and why David still believes Chicago is a strong market despite the headwinds.
For Chicago investors, this episode is a reminder that real estate works in more than one way. You can chase heavy value-add deals, or you can buy quality buildings in strong neighborhoods, manage them well, let rents stabilize, and allow time, leverage, appreciation, loan paydown, and tax benefits to do their job.
Questions We Answer in This Episode
Q: What’s the housing provider tip of the week?
A: With heavy rain and flooding, Mark recommends having a second sump pump or backup sump pump plan. A second pump helps if the first one fails, and a battery backup can matter even more in areas where power outages are common.
Q: Who is David Shifrin?
A: David is a plastic surgeon and Chicago real estate investor who owns 40 apartments across seven multifamily buildings in Bucktown, Wicker Park, Ukrainian Village, and the Logan Square/Avondale border.
Q: How did David start investing in real estate?
A: David bought a condo in 2004, later paid it off, sold it, and used the proceeds through a 1031 exchange to move into rental property.
Q: Why does David focus on A-class neighborhoods?
A: David wants to own buildings in areas where he would be happy to live. He also wants rental units that are easier to lease, easier to manage, and attractive to tenants who value quality housing.
Q: Is David’s portfolio cash flowing?
A: Yes. David says his portfolio is cash flowing just under 10% after maintenance, capex, mortgage, and other expenses. He compares that against the stock market and sees it as a strong return, especially with appreciation and loan paydown on top.
Q: How does David use 1031 exchanges?
A: David has used 1031 exchanges several times. He explains that the funds from the sale must go to a qualified intermediary, then the investor identifies replacement properties and closes within the required timeline.
Q: Why should investors avoid forcing a bad 1031 deal?
A: Tom and David talk about how investors can make poor decisions when they feel pressured by the 1031 timeline. If the replacement deal is not right, it may be better to pay the tax than force a bad acquisition.
Q: Can turnkey buildings still create value?
A: Yes. David says a turnkey building can still have value-add potential if the rents are below market. In one example, he saw rents that were $200 to $300 under market and knew he could stabilize them over one or two years.
Q: What was David’s biggest mistake?
A: David points to a full gut rehab where he used a contractor referred by a family member, even though his gut told him not to. He eventually fired the contractor and lost around $100,000.
Q: What is David’s advice for someone buying their first Chicago property?
A: Find someone experienced who can help you analyze the deal. If the numbers work and it does not put you in a financial hole, move forward and learn from the process.
Show Notes
01:46 Housing provider tip: second sump pumps, backup sump pumps, and flooding risk
02:41 David Shifrin returns to the podcast and gives an update on his portfolio
03:56 David’s current portfolio: 40 apartments across seven multifamily buildings
05:13 Finding cash flow in A-class neighborhoods and benchmarking against the stock market
07:20 How David uses 1031 exchanges to scale into better rental buildings
11:32 Selling vacant land from his practice and rolling it into a Logan Square/Avondale building
17:27 Why turnkey buildings can still work when the rents are under market
23:14 Breaking down the numbers behind David’s A-class Chicago portfolio
25:32 The contractor mistake that cost David $100,000
33:23 Financing, commercial lending, higher down payments, and future refinance options
Takeaways for Chicago Property Managers and Landlords
Flooding preparation matters, especially in basements and garden units.
A second sump pump or backup sump pump can prevent a small issue from becoming a major loss.
Cash flow can still exist in A-class neighborhoods, but the strategy is different.
Better neighborhoods can reduce management headaches, leasing friction, and tenant issues.
Turnkey does not mean there is no upside. Below-market rents can still create value.
1031 exchanges can help investors move equity from one property into another, but the replacement deal still needs to make sense.
Do not force a bad deal just to avoid taxes.
More equity in a property can mean lower debt service and stronger monthly cash flow.
Contractor selection matters, especially on full gut rehabs.
Buying in your comfort zone can be a reasonable strategy when you understand the neighborhood, tenant base, and long-term plan.
Guest info
Guest Name: David Shifrin
Guest Company: Elite Properties Chicago
Guest Link: https://www.elitechicagoproperties.com/
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
