Two-flats, three-flats and other 2-4 unit buildings are the classic Chicago investment, and small apartment buildings up to 9 units sit in the same box. Renovating them pays in Illinois: ATTOM's Q2 2026 figures show a typical gross flipping return of 45.8% in the state, against 21.5% nationally (on our 2026 financing data page). Most Chicago renovations, though, end in a rental rather than a sale.
Our loans start at $1M, so the typical file is a larger building, a renovation at the upper end, or several buildings together. Below $1M we refer to a partner.
The loan
Drawn in arrears means you pay for each stage first and the lender reimburses it after inspection. Keep enough cash to fund one stage ahead.
| Term | Passy Capital |
|---|---|
| Leverage | Up to 90% of total cost: purchase plus renovation |
| Check on value | Up to 70% to 75% of after-repair value |
| Term | 12 to 18 months, interest-only |
| Renovation funds | Drawn in arrears against completed, inspected work |
| Property | 1-4 units and small multifamily up to 9 units, fully residential |
| Fee | 1% to 2% at closing, no upfront fees |
When the full 90% is available
The loan is the lower of the cost test and the value test. On a hypothetical $1M purchase with a $400,000 renovation, total cost is $1.4M and 90% is $1.26M. For the cost test to set the loan, the after-repair value has to support $1.26M: at least $1.68M at 75% of ARV, or $1.8M at 70%.
Put generally, the finished value has to be at least 1.2 to 1.29 times total cost for the full 90% to be available. Below that, the value test sets the loan and you bring more equity. On a rental, the after-repair value rests on the rents the renovated units will achieve, which is why the scope should be written unit by unit.
From renovation to rental
The refinance repays the renovation loan. Test it before you buy: 80% of the leased value has to cover the renovation balance. The sequence is in refinancing a bridge loan into a DSCR loan.
Illinois and Chicago costs
Foreclosure in Illinois goes through the circuit courts, with a judgment, a statutory redemption period and a court-confirmed sale. It is one more reason a credible scope and realistic rents carry weight in the file.
| Tax | Rate |
|---|---|
| Illinois state transfer tax | 50 cents per $500 |
| Cook County transfer tax | 25 cents per $500 |
| Chicago transfer tax, buyer | $3.75 per $500 |
| Chicago CTA portion, seller | $1.50 per $500 |
What to send
A term sheet comes back in 24 to 48 hours. See renovation loans and investment property loans in Chicago. A non-US investor borrows on the same terms through a US LLC and does not need to travel to close.
- Address, unit count, price and current rents
- A line-item scope of work by unit and common areas
- Rents for renovated comparable units nearby
- Your track record and the contractor's
- The LLC that will borrow, and proof of equity and reserves