Updated
Scenario assumptions
| Location | Logan Square, Chicago, Illinois |
|---|---|
| Property type | Illustrative 1910s Logan Square brick two-flat (garden duplex-down + top unit) |
| Loan type | Modeled hard money bridge → DSCR cash-out refinance |
| Loan amount | $553,500 modeled bridge (90% LTC) → $584,500 modeled DSCR loan (70% LTV) |
| Close time | 10 business days modeled for the bridge; 25 business days modeled for the refinance |
What this Logan Square scenario tests
This is an illustrative financing scenario, not a completed Jaken Finance Group loan. Every number below is an assumption chosen to be realistic for Logan Square in 2026. Use it to pressure-test your own two-flat before you write an offer.
Logan Square two-flats rarely fit the classic BRRRR promise of pulling every dollar back out. Purchase prices are high, Cook County taxes are heavy, and rents have not risen as fast as values. The question this example answers is simple. How much rental debt can a renovated Logan Square two-flat actually carry, and what does that leave in the deal?
The modeled investor buys a tired brick two-flat near the Blue Line. The plan connects the first floor to the basement to create a garden duplex-down unit, then refreshes the top unit. A hard money bridge covers the purchase and renovation. A DSCR loan, which qualifies on the property’s rent instead of the borrower’s personal income, replaces the bridge after lease-up.
For current program details, start with our Chicago hard money lending guide and DSCR loans in Chicago. Neighborhood specifics live on the Logan Square hard money page and the Logan Square DSCR page.
Acquisition and renovation budget
| Project item | Assumed amount |
|---|---|
| Purchase price | $475,000 |
| Renovation budget | $140,000 |
| Total project cost | $615,000 |
| Assumed after-repair value (ARV) | $835,000 |
The renovation budget is where Logan Square duplex-down projects succeed or fail. Basement bedrooms need legal egress windows and adequate ceiling height. Rear porches often need permit work before any lender will call the building rent-ready.
| Rehab line | Assumed cost |
|---|---|
| Basement finish with egress windows (duplex-down) | $48,000 |
| Two new kitchens | $34,000 |
| Three bathrooms (two garden, one top unit) | $27,000 |
| Electrical service and separate meters | $12,000 |
| Two HVAC systems | $11,000 |
| Rear porch and stair repairs | $8,000 |
| Total | $140,000 |
How the bridge loan was sized
Jaken Finance Group’s leverage policy funds the lower of eligible loan-to-cost and 75% of after-repair value. Here that means comparing two numbers.
- 90% LTC on $615,000 = $553,500
- 75% of $835,000 ARV = $626,250
The lower figure, $553,500, sets the modeled bridge. It splits into a $413,500 purchase advance (about 87% of the price) and a $140,000 renovation holdback released in draws.
| Bridge term | Modeled input |
|---|---|
| Loan amount | $553,500 |
| Interest rate | 10.5% interest-only |
| Origination | 2 points ($11,070) |
| Term | 12 months |
| Draw method | Inspection-based, five draws |
The 10.5% rate sits inside Jaken Finance Group’s published hard money range of 8.99%–13.5%. Your quote depends on experience, credit, and the property.
Cash needed at closing
| Closing item | Modeled amount |
|---|---|
| Down payment ($475,000 − $413,500) | $61,500 |
| Origination points | $11,070 |
| Chicago buyer-side transfer tax (0.75%) | $3,562.50 |
| Title, legal, and appraisal | $4,400 |
| Cash to close | $80,532.50 |
Draw schedule for the duplex-down
The $140,000 holdback is released in five draws. Each one follows an inspection of completed work.
| Draw | Work the inspector confirms | Release | Total released |
|---|---|---|---|
| 1 | Demolition, basement slab work, egress openings cut | $28,000 | $28,000 |
| 2 | New electrical service, separate meters, rough plumbing and HVAC | $30,000 | $58,000 |
| 3 | Framing and rough inspections passed, insulation, drywall | $26,000 | $84,000 |
| 4 | Both kitchens, three bathrooms, rear porch rebuilt | $36,000 | $120,000 |
| 5 | Finishes, final city inspections, porch sign-off | $20,000 | $140,000 |
The basement work is front-loaded. Draws 1 and 2 cover the scope most likely to surprise you: slab, drainage, and the electrical service. Schedule the egress and porch permit inspections so they do not hold up draw 3.
Eight months of carrying costs
Interest on a draw loan only accrues on money actually advanced. The purchase advance accrues from day one. Rehab funds accrue as they are drawn.
| Carry item | Calculation | Amount |
|---|---|---|
| Purchase advance interest | $413,500 × 10.5% ÷ 12 × 8 months | $28,945 |
| Rehab interest, months 1–5 | ~$70,000 average drawn × 5 months | $3,062.50 |
| Rehab interest, months 6–8 | $140,000 fully drawn × 3 months | $3,675 |
| Taxes, insurance, utilities | $1,400 × 8 months | $11,200 |
| Total carry | $46,882.50 |
Total cash in the project before the refinance is $127,415: $80,532.50 at closing plus $46,882.50 of carry.
Deal timeline
| Week | Milestone |
|---|---|
| 1 | Offer accepted; scope walk with general contractor |
| 2 | Bridge closes in 10 business days (modeled) |
| 3–6 | Permit review for basement egress and porch work |
| 7–24 | Rehab in five inspection-based draws |
| 25–29 | Both units listed and leased on 12-month terms |
| 30–33 | DSCR appraisal with rent schedule; refinance closes |
| 34 | Bridge paid off; first DSCR payment due |
Stabilized rent and the refinance test
The model assumes $3,150 per month for the 3-bed, 2-bath garden duplex and $2,950 for the updated top unit. That totals $6,100 per month. Post-renovation taxes are modeled at $1,300 per month, higher than the pre-rehab bill, because Cook County reassessment often follows a major renovation. Landlord insurance is modeled at $250 per month.
The refinance rate is modeled at 6.99% on a 30-year amortization. That sits inside Jaken Finance Group’s DSCR range of 5.75%–10.5%.
| Refinance option | 65% LTV | 70% LTV (chosen) | 75% LTV |
|---|---|---|---|
| Loan amount | $542,750 | $584,500 | $626,250 |
| Principal and interest | $3,607.28 | $3,884.76 | $4,162.25 |
| Total PITIA | $5,157.28 | $5,434.76 | $5,712.25 |
| DSCR ($6,100 ÷ PITIA) | 1.18 | 1.12 | 1.07 |
| Cash after 12% reserves | +$210.72 | −$66.76 | −$344.25 |
| Net to investor after payoff and costs | −$19,657.50 | +$21,675 | +$62,007.50 |
PITIA means principal, interest, taxes, insurance, and association dues. The “12% reserves” line sets aside 5% for vacancy and 7% for maintenance, assuming the owner self-manages.
Why the 70% option won
Each column solves a different problem. None of them solves every problem.
The 75% option returns the most cash, about $62,000. But the building would lose roughly $344 a month after reserves. One vacancy or a tax increase would push the owner into feeding the property every month.
The 65% option produces positive monthly cash flow. But the new loan is smaller than the bridge balance. The investor would have to bring about $19,700 to closing just to refinance.
The 70% option is the middle path. It returns about $21,700 and runs close to breakeven with reserves funded. After the refinance, roughly $105,740 stays in the building against about $250,500 of equity.
That is an honest Logan Square outcome. The return comes mainly from equity creation and loan paydown, not monthly cash flow. If you need full capital recycling, look at neighborhoods where the gap between purchase price and renovated value is wider.
What could break this scenario
- Tax reassessment above the model. Every extra $100 a month in taxes lowers coverage by about 0.02.
- Basement unit not approved as a bedroom. Without legal egress, the garden rent drops and the appraisal falls with it.
- Appraisal below $835,000. At $800,000, a 70% loan is $560,000, barely above the bridge payoff.
- Rehab overrun. A $20,000 overrun is not financed by the bridge in this model. It comes straight from the investor.
- Slow lease-up. Each extra month on the bridge costs about $4,843 in interest once fully drawn.
Sixty extra days: the lease-up stress test
Suppose the garden unit takes two extra months to lease. The bridge is fully drawn by then, so each month costs $4,843.13 in interest plus $1,400 of taxes, insurance, and utilities.
| Line | Plan (8 months) | Two months late (10 months) |
|---|---|---|
| Total carry | $46,882.50 | $59,368.75 |
| Cash in before the refinance | $127,415 | $139,901.25 |
| Net from the 70% refinance | +$21,675 | +$21,675 |
| Cash left in the building | $105,740 | $118,226.25 |
The refinance amount does not change, because it depends on value and rent, not on how long you took. Every late dollar stays in the deal. A 10-month hold also leaves only two months before the 12-month bridge term ends, so an extension fee becomes a real possibility.
Now add a low appraisal. At $800,000, the 70% loan is $560,000. After the bridge payoff and about $9,325 of refinance costs, the investor brings about $2,825 to closing. Combined with the late lease-up, roughly $142,700 stays in the building. The smaller loan does improve coverage, to about 1.16, and the building earns about $96 a month after reserves. Slower and lower still works. It just ties up far more cash.
Logan Square underwriting notes
Appraisers in Logan Square weigh proximity to the Blue Line and the 606 trail. Pull renovated two-flat comps on similar blocks, not single-family conversions. A two-flat that has been converted to a single-family home sells to a different buyer pool at a different price per square foot.
Lease both units before ordering the refinance appraisal. DSCR lenders typically use the lower of actual lease rent and the appraiser’s market rent. A signed 12-month lease at market supports the rent schedule far better than a projection.
Chicago’s Residential Landlord and Tenant Ordinance applies to most two-flats that are not owner-occupied. Budget for its security deposit and disclosure rules before you sign leases. Our Chicago RLTO guide for landlords covers the basics.
Before you copy this structure
Run your own numbers with the DSCR calculator. Model at least three refinance leverage levels, as shown above, before choosing a purchase price. Confirm your contractor has priced egress, porch, and electrical work in writing.
For more on the strategy, read the Chicago BRRRR strategy guide and our two-flat BRRRR underwriting article. To compare a lower-priced South Side example, see the Bridgeport two-flat BRRRR example.
Ready to test a real property? Submit your scenario or call (833) 264-7776.
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