All Forum Posts by: Ahmer Zaidi

Hi @John Bettridge,  I know this is an old post I'm resurrecting.  I'm a new investing from Orland Park.  It would be nice to connect and talk about your experience of investing in the area.

I know this is an old post but I'm a beginner investor from Orland Park.  It would be nice to connect and discuss your investment experience in the area.

The credit score requirement is going to be different and dependent on the class of property.  I currently have 1 property in a B+ class area I require a score of 700+.  I manage a few properties in a C class area and look for 580+, but in a lower-class area, I personally focus on monthly income.  2 out of 4 tenants in that area don't have any credit.  They are immigrants that are working hard and meet income requirements and pay cash.

Overall, it's not one size fits all and heavily dependent on the demographics of the area.

I'm no expert and don't have any experience with non-residential commercial properties but seeing that the lease is still fresh you'll need to determine the path of least-loss.  On one hand, the terms of the lease are legally-binding and can be enforced with a cost plus the cost of potential rent loss during that time and vacancy after the fact.  At this juncture, having a strong word letter by your attorney is a good place to start. On the other hand, work with the existing tenant to come up with new lease terms where both parties are satisfied.

The Orland/Tinley/Homer Glen area is the tough market for investment.  I've been looking in this same area for a while.  Re: Tinley Park, you want to stay on the west side of Harlem Ave because then you'll be in the Andrew HS district and property taxes are less also. IMO, this area is very desirable for professionals and with all the new construction of roads, retails and restaurants in Orland which is the central hub for Tinley and Homer Glen prices are at a premium.  The only deal worth buying for an eventual invest would be something that needs TLC.

My parents just sold there 6-unit commercial residential building this past year.  The building was purchased in Aug 2008 (not the best time time for real estate) but the property has had very low vacancy for the last 10 years.  Taxes are high as you mentioned because it's in Cook County.  Additionally, the city inspectors are a pain in the ***, they routinely fail inspections for issues that passed the previous year inorder to collect re-inspection fees.  Additionaly, the local police department started to impose to "crime-free" fee to the owner and additional paper work that needs to be provided to them for new tenants.  I've helped manage the property for since it was purchases to until it was sold i've noticed the quality of community in Oak Forest has gone down.  Our tenants and all the other tenants on the street were mostly professionals and retirees and now tenants consist of laborers and cash workers. 

Hi Joseph. I'm new to BP and also from the Chicagoland area. Just wanted to follow up on your post and see if you have found an MFR?

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $119,500
Cash invested: $48,000

This is my first real estate investment. The property is a 2bd 2ba condominium. The property was in fairly good shape. Rehab included patching and paint, new laminate flooring throughout, new windows and new dishwasher.

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

I wanted my first real estate investment to be a condo in order to avoid having to directly deal with external maintaince of the property and wanted a property in which tenents paided all utilities. I live in the neighboring town so this property is close so I can manage it myself.

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

I found this deal on the MLS and noticed the description mentioned the condo was investor friendly. The propety was currently rented and the tenant was going to move out and the seller would need to pay the mortgage out of pocket after that. I used that knowledge as leverage and kept submitting verbal offers after every price drop. Using the every price drop to reset negotiations. My max offer was once 122K which was rejected and my next offer was 118K and settled on 119.5K :-)

How did you finance this deal?

30 Year Fixed Conventional Loan @ 4.5% 25% Down.

How did you add value to the deal?

I added value with my persistance. I has an alert on the property and I showed up after every price reduce to let the seller know I was a serious buyer.

What was the outcome?

After the seller rejected 3 of my offers after the last price reduction the seller's agent then reached out to my agent to see if I was still interested.

Lessons learned? Challenges?

In retrospect, IMO, this is a good deal but not a great deal. I invested $13K into repairs, dishwasher, windows and flooring none of which will add to the value of the property. Although I budgeted $15K for initial repairs, the appriasal was only $500 above the purchase price. I need to do a better job of comparitive analysis prior running the numbers and making an offer.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

My agent and lender were both mediocre when it came to working with an investor.