Chicago 2 Flat BRRRR diary

[Kyle D Birch]

I purchased 11147 S Longwood in Chicago on June 26th for $159,000 @ 4% down with all closing costs paid by the buyer. The home was listed for $200,00. The home was listed as a SFH with related living. The home has 2 hvac systems, 2 kitchens, 2 baths, 4 bedrooms and 4 entries/exits. The home bed the following repairs;

New doors

New windows

Fresh paint

Refinished hardwood floors

New central air

Block off doorway connecting two apartments

Legally change zoning to 2 family

2 New fridges 2 new stoves 2 new washers 2 new dryers

New bottom cabinets

New countertops

Install light fixtures in each room

Reglaze tubs

Replace bathroom fixtures

Install sub panel for 2nd unit which previous owner removed.

Replace all outlets & switches

Install vapor barrier in crawl Space

The cost of the job is as follows;

-New 2 ton compressor/new coil & supplies $1100

- Central air install $600

- Sub panel supplies & install $500

- All supplies & utilities $15,000

- Labor $6,000

- Appraisal $500

- inspection $400

- Lawyer $500

- Lawyer fee for zoning correction pending

When we began the rehab we noticed the previous owner created a doorway between the apartments and originally the was a brick wall between the two units. The neighbor of 40 years recalls it being a legal two flat prior to the previous owner purchasing.

Adjacent to the rear of the property is the Metra commuter train to downtown. This is a major attraction for tenants.

The building only has 1 meter for gas, electric, water so I will be responsible for this expense. I listed the units on Zillow as follows

3BR 1BA $1650 per month +$150 utility fee

1BR 1BA $1075 per month +$125 utility fee

I a weeks time, I had 50 calls to see the units. I only replied to text and emails and sent the application.

Today, I showed the apartment to 4 prospects and secured one for each unit. Tenants were eager to sign despite the apartment not being ready until August 15th.

Cash invested $31,000

Financed $155,200 @4%

Monthly payment $1,231

Monthly gas estimate $100

Monthly water estimate $125

Monthly electric estimate $125

Monthly income $3,000

Monthly expenses $1,531

I will add pictures once complete and update as I go.

The home appraised for $172,000 prior to rehab and as a single family home. I will be looking to refinance once the zoning is complete.