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First get your financial life in order. Pay off debt/ build emergency fund/ target your pref tax accounts. After doing all of the above you can start looking at RE.
A popular method to getting started is called "house hacking" where essentially you buy a quadplex and use your FHA loan (loan from govt allows you to have small dp on house) and rent out the other units and covers your mortgage.
Otherwise you generally need 100k to comfortably start investing. Interest rates are high rn so don't have FOMO. It's not a great time to get started.
I completely agree that real estate requires large capital. Definitely keep an eye out for opportunities, but build your capital as soon as you can. Jumping into investment of that size with little to no capital can set you back for years to recover especially in this high interest market.
I haven’t found any cities where the buy to rent ratio makes sense for investors these days. Maybe you will find it , best wishes if you do.
With that said, house hacking is the way to go. Buy a du/tri/quad plex and live in one, rent the others. You’ll save a little on your regular housing costs, and can (ideally) eventually raise rents or refinance rate. The goal is for housing appreciation, so you want to buy in the earlier the better.
Coach
Agreed SC1. I think you should primarily look for the other units being able to cover the entire mortgage / cash flow.
When I discussed cap rate I was referring to thr guys comment about looking for a city.
Join bigger pockets community and read their books
And listen to their podcast. It's excellent.
Coach
I bought my first rental property at 23 on a $50k income. I bought a duplex and lived in half. Then moved out and did it again. Smartest thing I ever did. I'd advise you to save up a down payment and go for it. You're probably looking at a $250k starter property. I'd suggest saving up $25k for down payment and $15k for start up costs.
Michael zuber from One rental at a time on YouTube has a great course
to answer about how much money to save up—assume 5% down minimum and 5% closing costs. Then add about 15-20k to that to make sure you have enough reserved for catastrophic stuff, furnishings, small things that might come up in inspection, etc. if you already have an emergency fund outside of this than probably don’t need as much here.
So if you find a duplex for $350k (I don’t know anything about Chicago) then assume you’ll need ~35k for the transaction and *should* have about 15k available if you need a new hvac or roof repair right away
Find a local meet up group and learn from older investors. They can walk you through the ways they did it and guide you on how you can do it today. Do not be afraid of Hard Money and always have an exit strategy (which usually means sales or refi's).
Recently just got myself Certified, Currently looking for a job and I'm asking the same question