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Author: Mark Ainely | Partner GC Realty & Development & Co-Host Straight Up Chicago Investor Podcast
Chicago inventory is tight, prices keep climbing, and many buyers feel like the numbers on a two-flat or four-unit building just don't work anymore. So how are some investors still getting deals done?
Jason Wagner has an answer, and it isn't one magic trick. It's a set of practical moves anyone can start using right now.
According to Jason, Chicago has roughly 6,500 active listings today compared with about 12,000 five years ago, and prices have increased for 30 consecutive months. Owners are benefiting, but buyers who wait may find it harder and harder to get into the market.
In this episode of the Straight Up Chicago Investor Podcast, Tom Shallcross and Mark Ainley welcome back Jason Wagner of Greystone Realty to walk through five actionable steps for buying real estate in today's market. Jason covers asking family for down payment help, widening your neighborhood search, house hacking with rent-by-room and mid-term rentals, partnering with friends, and why the fourth quarter is the best time of year to buy in Chicago.
He also shares a bonus tip on temporary rate buydowns and explains how a seller credit can lower your interest rate for the first two years of ownership.
Whether you're buying your first Chicago two-to-four-unit building or adding to your portfolio, this short episode offers a clear, realistic game plan for a competitive market.
Questions We Answer in This Episode
Q: Why is it so hard to buy real estate in Chicago right now?
A: Jason points to inventory. He reports about 6,500 listings in Chicago today compared with roughly 12,000 five years ago, close to a 50% drop. That shortage has pushed prices up for 30 consecutive months, and he expects the trend to continue, which makes it harder for new buyers to get into the market while existing owners benefit.
Q: Should buyers ask family for help with a down payment?
A: Yes. Jason's first step is to swallow your pride and ask. Saving is difficult as costs rise, and a lower loan amount is one of the most effective ways to lower your monthly payment. While some loans allow 5% down, that leaves a higher payment. A family gift that gets you to 20% or 25% down can make a big difference, and Jason notes that parents, grandparents, siblings, or uncles may actually feel honored to help. Tom adds that family help can also be structured so everyone wins, such as through equity or a loan at a lower rate. Jason notes that when the money is used as a gift, the lender will want a gift letter stating that nothing is expected in return, so talk with your lender about how any family help should be documented.
Q: How can widening your search help you find a deal in Chicago?
A: Jason reminds buyers that Chicago has 77 neighborhoods. The North Side is expensive, but buyers can find two-to-four-unit properties on the South Side in the $300,000s or less. If you want to stay on the North Side, he suggests looking at "quirky" properties, such as buildings on busy streets or properties other buyers have passed over, because that's where opportunity may be found.
Q: How does house hacking work in today's market?
A: House hacking means living in one unit of a two-to-four-unit building and renting out the others. Jason sees more people going beyond traditional long-term leases. Rent-by-room is gaining traction, with owners getting between $500 and $800 per bedroom. Mid-term rentals, meaning stays longer than 30 days but less than a year, can bring in 30% to 50% more rent than a long-term lease, according to Jason. Typical mid-term renters include traveling professionals, such as traveling nurses, and family members in town to visit.
Q: How can investors estimate rent-by-room income?
A: Jason mentions PadSplit as one platform he's familiar with. As with any rental, the approach is to look at comparable listings. Tom suggests searching as if you were trying to rent a room yourself to see what's out there.
Q: How do real estate partnerships with friends work?
A: Jason explains that a gift for a down payment generally has to come from family, so partnering is the way to work with friends. He shares the example of a client who bought a four-unit building in Humboldt Park with a friend who lives on the East Coast. The client was the owner-occupant, and the friend brought the money. Both went on the loan and own the property together, and because one partner lives in the building, they could use a low down payment strategy. Jason has done the same thing himself with four other people, with four separate properties and four different agreements. The hosts note that this deal is covered in more detail in Episode 470.
Q: Why is the fourth quarter the best time to buy in Chicago?
A: Jason calls October, November, and December "deal season." He says the market sees about 50% fewer buyers in November and December than in the peak spring selling season. Then, on January 1, the market shifts back into what he calls "frenzy mode," with buyers calling their agents and competitive bidding returning. He describes Chicago's seasonality as incredibly predictable, which is why he says Q4 is the time to buy.
Q: What if the numbers on a first two-to-four-unit building don't pencil?
A: Jason encourages buyers to look at the full picture. Today, cash flow is not necessarily the biggest factor. Market appreciation, principal paydown with tenants helping pay the mortgage, and tax benefits all contribute to building wealth. To improve cash flow, he points back to mid-term rentals, renting by the room, staying on top of your leases, and keeping up with market rents, which he says are rising about 3% to 6%.
Q: What is a temporary rate buydown, and how can it help buyers?
A: In Jason's bonus tip, he explains that a temporary buydown is often called a 2-1 or 3-2-1 buydown. Jason says 2-1 buydowns are used with conventional loans and 3-2-1 buydowns with FHA. In his 2-1 example, if your quoted rate is 7%, you could pay 5% in year one, 6% in year two, and 7% for years three through thirty. The seller pays for the buydown, so you need an agent who knows how to structure the deal. In a competitive situation, Jason describes winning the deal first, for example at $500,000, then asking to increase the price by $15,000 and receive it back as a credit to buy down the rate. Tom clarifies that this is not an adjustable mortgage. The rate is fixed after the first two years. Jason adds that he built a mortgage calculator with 2-1 and 3-2-1 buydown buttons at wagner-report.com.
Show Notes and Timestamps
00:00 Tom Shallcross and Mark Ainley welcome back Jason Wagner for a Straight Up Tuesday Tip.
00:42 Chicago's inventory problem: about 6,500 listings today versus 12,000 five years ago, and 30 consecutive months of price increases.
01:28 Step one: asking family for help with a down payment, and how lenders treat gift funds.
02:41 Step two: widening your search across Chicago's neighborhoods and looking at "quirky" North Side properties.
03:13 Step three: house hacking with rent-by-room and mid-term rentals.
04:55 Step four: partnering with friends, including an owner-occupied four-unit in Humboldt Park.
06:17 Step five: why the fourth quarter is deal season in Chicago.
07:32 Advice for first-time two-to-four-unit buyers when the numbers don't pencil.
09:09 Bonus tip: temporary 2-1 and 3-2-1 rate buydowns paid with a seller credit.
10:37 The Wagner Report mortgage calculator with buydown options.
Key Takeaways for Chicago Landlords and Investors
Tight inventory is the defining feature of today's Chicago market. Fewer listings mean more competition for buyers and stronger values for current owners.
A larger down payment lowers your loan amount and your monthly payment. Family gifts can help, but they need proper documentation for your lender.
Don't limit yourself to one part of the city. More affordable two-to-four-unit options may be available on the South Side, and overlooked North Side properties may offer room to negotiate.
House hacking remains one of the most accessible ways into multifamily ownership, especially when you live in one unit and rent the others.
Rent-by-room and mid-term rentals can increase income, but they require research on comparable rents and more hands-on management.
Partnerships with trusted friends can combine an owner-occupant with a capital partner. Clear, written agreements are essential.
Seasonality matters. Fewer buyers in November and December can mean better opportunities before the January rush.
When cash flow is tight, consider the full return picture, including appreciation, principal paydown, and tax benefits.
Staying on top of lease renewals and market rents helps protect your building's financial performance.
Temporary rate buydowns funded by seller credits can lower payments during the first years, when many owners are stabilizing, renovating, or re-leasing a property.
Work with an experienced agent and lender who know how to structure gift funds, partnerships, and seller credits correctly.
Guest info
Mark Ainley
Founder & Partner – GC Realty & Development
Podcast Co-Host – Straight Up Chicago Investor
Guest Name: Jason Wagner
Guest Title: Designated Managing Broker
Guest Company: Greystone Realty
Guest Link: https://www.straightupchicagoinvestor.com/build-your-team
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
