All Forum Posts by: Adriel Cisneros

Thank you @John Warren 

Appreciate it. 

For this reason I primarily stay within the confines of Chicago. 

And in a city like Austin or Dallas, it seems like construction is always prevalent so it will affect supply despite the influx of new workers moving to the central and north Texas. 

Have a great rest of your week. 
 

@Jonathan Klemm 

Appreciate the insight. 

I don't disagree with the concept of building a great team. My only concern is tenancy laws in Cook County and vacancy risk with smaller acquisition targets. 

One bad tenant can absolutely crush your NOI and thus every subsequent metric.

Open to having a conversation offline. Have a great Monday.

Hello BiggerPockets family  - 

In my view, both employment and population growth are important but incomplete factors when considering acquiring an asset if the replacement cost is lower than the appraised value of the small apartment.

For this reason, I would prefer to invest in Chicago compared to a city like Austin, TX USA. 

However, where do you find reliable contractors or brokers who can provide this type of data? 

Acquisition target: triplexes in Chicago north of I 290

@Greg Scott 

My preference for Chicago is based on a few reasons. 

Team cohesion /  

I am an IL native and our accountant, broker, and local contractors all reside  within 30 miles of each other. 

We rely less on Zoom or Slack and leverage our interpersonal relationships for the best outcomes. 

Aka ... 

I can tour multiple acquisition targets throughout the week in person with appraisers and contractors without leaving the state.

Side note, most of our prospective LPs also live in Chicago and Deerfield, IL. 

Expertise / 

We know the Chicago submarkets very well. 

Translation. 

We can identify value add opportunities in targeted neighborhoods. Our team has extensive knowledge of IL tenancy laws. And LPs can rely on our assumptions across all aspects of income, expenses and capital expenditure plans. 

As a result, we see more value staying in the City than sourcing deals from outside IL.

Hope this helps. 
 

Hello BiggerPockets community,

As I begin underwriting smaller acquisitions targets in both Logan Square and Englewood, I find it hard to project anything beyond a 10% IRR, CoC above 3.5%, and an equity multiple north of 1.06.

At the moment, I lack the sufficient experience, net worth, and UNHW LP base to analyze larger apartment deals. 

In my view, smaller apartments are ripe for acquisition (i.e market inefficiencies, etc.) since fewer shrewd, sophisticated GPs are available to make offers. 

Hence, less competition. 

However, the pro forma will not appeal to a more affluent LP pool outside of Chicago. And this is necessary before I can accrue the necessary equity to make an offer on a prime opportunity. 

Any thought? 

An alternative may be to allow for a direct investment through a holding company (LP) that holds an LLC under which the asset is acquired, managed, and ultimately liquidated.

BiggerPockets community,

Here is my dilemma. 

My primary LPs are friends and family that fall shy of the accredited investor income requirements. They are mostly Spanish speaking small business owners in Pilsen and the lower West Side of Chicago. 

Part of my strategy as a GP is to leverage YouTube shorts (Spanish) and MeetUps to widen my investor base. 

A 506(c) syndication would make sense but it only allows for accredited investors. And a 506(b) syndication is a great alternative because it permits up to 35 sophisticated investors but I cannot rely on my prior advertisement efforts. 

What is the best way to integrate my current LP pool with the correct syndication structure?

Thank you gentlemen for the thoughtful replies. 

Much appreciation. 

As a small Sponsor and Operator in Chicago,

Are Section 8 tenants the best way to mitigate vacancy loss for small multifamily properties (<4 units)?

I read the Bigger Pockets article on why Section 8 presents numerous risks to the Landlord. And I agree most can materialize to the determent of the Owner but how do you serve a need for affordable housing in the south side of Chicago?