House Hack In Chicago!

[Bryan Bokowy]

Hey everyone! I'm currently in the process of purchasing my first 4 unit multifamily property in Chicago.  I want to make sure the numbers I have in my pro forma are as accurate as possible before moving forward.  I have a few questions below that I'm hoping I can get some help with.

1) Taxes - I have the annual taxes that I took off Redfin.com from 2016.  I'm sure they've increased since then, what the best way to estimate my current taxes?  Also, would taxes be lower as I'll be living in one of these units? 

2) There is currently laundry on-site in the basement for the four units. I have around $2k built in for water/sewer/garbage.  Is that realistic?  A friend of mine invests just outside the city and his water/sewer/garbage pushes nearly $3k and that's for a 3 unit property.  Also, I'm told that adding washer/dryer in each unit would increase rents.  Has anyone done this?  I just had an inspection done and the inspector advised against it.  He said all it takes is one leak (which is inevitable) from the second floor to cause a ton of damage.  If anyone has put washer/dryer in units for additional rent, what has your experience been like?

3) Rents - I've been looking on Craigslist and Trulia, etc. for comps on what I can get for rent.  However, there is such a huge range that it's hard to tell what is realistic.  Does anyone recommend other avenues?

Thanks! Any help would be greatly appreciated!

[Brie Schmidt]

@Bryan Bokowy - If you are working with an agent they should be able to walk you through all of this.  That is their job.

1. Taxes -  Your agent should be providing you with the 2016 taxes and 2016 assessment and the 2017 assessment (we don't have 2017 taxes till Aug)

2018 is a reassessment year and during the 2015 reassessment a lot of people got increased to their purchase price.  So when I run numbers for my clients I always do a projection based on the purchase price.  (take price * .018) and tell them to base their numbers off the increase.  It may not happen next year, it may not happen for a few years, but if the numbers work for you with the increase you will be pleasantly surprised if you are paying less for awhile.  Homeowner exemptions are like $500 / yr

2.  I assume $500 per unit per year for my clients.  If you are metered you should be good at $2k a year.  I would never add in unit laundry unless there is an easy place to do so.  Most of Chicago buildings share a drain stack (the kitchen and bathroom are back to back) and the W/D needs to tie into that.  Usually there is nowhere for it to go and you need to add a new drain stack, and it will not be worth it

3. Rents - Ask your agent, this is their job.