Starting in the Chicago Area - 60628

[Holden M Lombard]

Hi All, I'm excited to get started in real estate investing. A little about me so you know who you're responding to: I'm a Notre Dame grad, Chicago Public Schools Physics Teacher, originally from New Orleans, La. I'm brand spanking new but I've listened to many BP podcasts and short videos, I've read several books, I've been lurking on here for a bit trying to absorb the great insight from the community, and I've done my best to analyze what I know to look for. Now I would like to ask you all about a potential first deal, is it as good as I think it is?...thank you in advance for your help... Here we go:

- West Roseland area of Chicago, 60628

- Turn Key 2 Flat, 3BR 1 Bath in each apartment, unfinished basement

- Complete gut renovation last month by seller (everything except the roof is new)

- Section 8 inspection completed by seller

- Property management company hired by seller to conduct all business with tenants at 8% rental income per month. This company claims to have 2 vetted and qualified section 8 tenants ready to move in at 1150/month post closing

- Asking price is 165k

- 27,600 annual income

- I qualify for a grant that will cover the down payment and seller will cover closing costs. 

- Here are my generously estimated annual expenses

Electric	0
Gas	0
Water ($2.01/1000gal)	482.4
Sewage (100% of Water)	482.4
Trash ($114/dwelling)	342
Property Management (8%)	2208
HOA	0
Lawn/Snow	900
Mortgage	18000
Vacancy (8%)	2208
Repairs	1200
25822.8

What do you guys think? What am I leaving out?

[Crystal Smith]

Just a few questions and recommendations below:

• Get a copy of the Section 8 inspection report.  You may want to consider having your own inspector on top of section 8 as part of the due diligence.
• Get a copy of the leases for the vetted tenants & call HUD to ensure the property qualifies for Section 8
• Your estimate has no electric or gas so I assume the property has separate utilities for each unit and the tenant is expected to pay.  Consider purchasing homeowners warranty at closing to cover all major systems in the property.  It will be worth it.
• Your missing Real Estate taxes & property insurance.
• Your missing Electric for common area.  This will be your responsibility.  Based on the location you should also include security for the property.
• Pay for a roof certification.  This way you'll know how much useful life is left on the roof.

Good luck