All Forum Posts by: Mike Kohan

But rehabbing is the most fun, @Alex Craig.  At least unless and until it goes sideways - then it can get stressful.  I just wish I was closer to the scene so I could be part of it from time to time.

My first, and current rehab is down to the bones. Roof, windows, doors, full electrical and plumbing upgrade, HVAC with ducting, re-framing the inside of the exterior walls, insulation and drywall - the works. This house is turn-of-the-last-century and we knew going in it was going to be all the way. The spread between purchase and ARV allows lots of overruns without loosing my shirt, but so far, the only unexpected is how long I needed to keep a house sitter in it for security. The permit process in Chicago really holds a lot of room for improvement!

The best part about a gut rehab, though, is I know exactly what I end up with and can sell it as a quality product with a clear conscience.  That, to me, is gold.

@Roy N. Thank you for the welcome.  It sure is a friendly group!  I'm originally from Toronto area, lived overseas for many years, then returned to BC in '93.  I absolutely love this part of the country for many reasons.  My wife is beginning to struggle with the winters, being from England originally, so we may have to adopt a "snowbird lifestyle"!  I'll bet your wife's family have a fascinating story to tell.  It's rugged terrain for building a railway through.  The remnants of the Kettle Valley line make for some amazing trails.

@Account Closed Thanks for the welcome and the offer.  I hope Memphis is treating you well.

@James Wachob and @James Martin Thank you for the welcome and the offer of assistance in your market area. I actually visited Memphis two, maybe three years ago to look first hand at the city and meet with a couple of Realtors a GC and a property management company. Awesome BBQ, and I loved Beal St!  Unfortunately, the overall consensus I got was it was great for SFR investing, but that was not my focus. But, things change. It's always good to have names to call when they do.

Cheers

@Jay Hinrichs Hard money lending - that is an angle I have not thought of, though it does have some parallels to opening a Payday Loans business I gave some thought to a few years back. I think your venture would result in more overall satisfying customer interactions, to put it as inoffensively as I can. We may need to have a conversation about this when I have some cash to put forward, some time in the future. One question I have for you now is; Did you ever have to go through a foreclosure in BC?

@Joel Sherlock I like that quote. I might use that...

@Samuel Sedore What I look for when I'm searching for a place to invest - I start with cities with metro area populations upwards of 500,000. Easy enough to find through a Google search. The inventory of sub-$100k properties is a little subjective, but homepath.com and homesteps.com can give a pretty good indication of the REO market in the subject city. The diversification of industries and the number of Fortune 500 companies headquartered there is an easy Google search - I like to see at least 5 of the latter, as it gives an indication of what the leaders of these companies think of that city and it's business climate. As for job and GDP growth, +2% makes a nice base. Anything over that is great, less than that, other fundamentals need to be stronger to support further investigating. Marcus&Millichap are a great source for this information.

Having said all the above, I am a newbie in the US market, so whether or not any of this is actually valid? - time will tell. For me, it's as good a place as any to start the search which brought me to Chicago.

I'm not sure if that is what you are asking for, Samuel. Your signature line would indicate I'm probably not telling you anything new.

Cheers

Hey guys, thank you all for your warm welcome to BiggerPockets.  It really does sound like a great network of like-minded people wanting more out of life than what a 9 - 5 can provide.  I must say I'm thrilled to see fellow investors from my corner of the globe.  The markets seem quite different between the US and Canada, but I guess the underlying concepts of real estate investing are much the same.  So in that regard it makes sense that this site would be useful to both.

So far, in my MBA course, I've covered; 

• investment property financing,
• rent-to-own (lease/options), 
• new home buying and new home warranties, 
• tenant selection and levels of due diligence in that regard, 
• property management,
• dealing with the police and city hall on sealed buildings, 
• grow-op remediation,
• financing and insuring a stigmatized house,
• negotiating the sale of a stigmatized house.

The grow-op certainly brought some interesting lessons in human nature, even in how the neighbors have treated follow-on tenants in the same house! The shallowness some people wear on their sleeve can be surprising.  I'm really happy to have supportive groups like the BP community.

Cheers

Hi guys,

Chicago's underlying fundamentals as one of the last emerging markets from the mortgage crisis looked, and still looks good to me.  Lots of distressed properties for under $100k, a city with many diverse Fortune 500 companies headquartered there, and a large renter pool.  Job growth and GDP growth were both increasing, if only modestly.  I was too late to jump on the Phoenix train, Memphis lends itself more to sfr investments (my focus is multi family) and Tampa/St Pete's went through a condo conversion phase, so again, a little restrictive for multi family.  Chicago just seemed to fit.

As for my $100k education, Chris, that is about how much I am going to loose on my first real estate investment attempt.  It was a lease/option purchased for a young couple who convinced me they wanted to save hard for two years and buy from me.  It was a brand new builder's showcase home, with all the high-end finishes he could put together.  I paid too much for the house and didn't do sufficient due diligence on the tenants.  After a walk-through inspection three months into the lease, and having told the tenants I would see them again for a walk-through in another 6 months or so, they figured out they weren't going to get the privacy they thought a lease/option would give them.  They did the midnight move after paying only 4 months rent.  The house remained empty for 8 months (expenses were covered by the option consideration they walked away from) until I found another lease/option tenant.  This guy was a model tenant, paying the rent almost always on time and keeping the house in "show" condition.  I visited 4 times in the first year, but just after the 14 month's rent went late, I got a registered letter in the mail to inform me the house was raided and my tenant busted with 490 pot plants in the basement! The remediation was covered by his option consideration, but the house now has a stigma attached.  My last tenant was finally a great pick, except after 18 months, his situation had changed and he had to cut the lease short.  I could make it cash-flow as a lease/option, but not as a straight rental.  Just too expensive with high taxes/insurance etc.  So out it goes.  It's been empty since October and we now have a negotiated purchase offer for $100k less than I paid for it five and a half years ago.  My Realtor said the stigma would cost me 10% of the value, and he was just about bang on!

Thanks for the welcome, Edison.

Where is your market of interest and are you flipping or BRRR'ing?

Flipping makes for quicker money in the pocket, but is not ongoing income.  I'm testing what I've learned on a single flip - seeing it through to completion and sale before going hard, leveraging to do multiple flips.  Hope to have the first one completed and on the market within the next 4 weeks.  It is a gut rehab - everything but the floors and exterior brick walls!  

Hi.  My name is Mike Kohan, I'm a husband and father, a career helicopter pilot and now real estate investor.  I started investing in real estate 5 years ago with a lease/option purchase close to home for a tenant, which is turning out to be my "$100k college education".  Last year I bought my first flip in Chicago, which we are still rehabing. 

 I stumbled across Bigger Pockets about 9 months ago, and am only now spending more time with listening to the podcasts and poking around the site, which I am really enjoying.  I'm looking forward to becoming a valued member of the community and being able to contribute to it in a meaningful way, soon.

Cheers