Chicago Condo overlooking Lake Shore Drive

[Joe Hermanson]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $260,000
Cash invested: $40,000

2 Bed/2 Bath Condo overlooking North Lake Shore Drive.

What made you interested in investing in this type of deal?

I read Rich Dad Poor Dad and knew I needed to do something to create passive income.

How did you find this deal and how did you negotiate it?

I was living in it when I decided to buy my Uncle's house he was having trouble selling. So I rented out the condo and moved into my uncle's house (2 Unit) to renovate it and rent one of the units.

How did you finance this deal?

It was my condo so it was set. To buy my uncle's house I had a land contract that I had 5 years to close on. After 2 years of Schedule E's on my taxes, I got a conventional loan.

How did you add value to the deal?

I removed everything from the 1960's and put in new items. I also put in laminate floors and removed the wall to the kitchen and dining room so you could see the lake from the kitchen. Renovated the kitchen and one of the bathrooms.

What was the outcome?

I rented the condo for 6 year and now that taxes and expenses have gone up (and it's not cash flowing as much as it should) I'm selling for a $120k profit.

Lessons learned? Challenges?

Take your time and choose good renters, after making sure it will cashflow.

[Daniel Cullen]

I'd love to see a breakdown of the numbers. Is any of the 'profit' eaten up by repairs, assessments, R.E. taxes, income taxes, etc. or is it free and clear?