All Forum Posts by: Alejandro Calixto

Hi @Joshua McMillion. Did you get anywhere with your search?

Hi @Ruben Fernandes. Did you get anywhere with your search?

Hi @Tia Wilson. Did you ever get any information on using a VA Construction loan or find a lender for that?

@Craig Myers that is a way to go for sure. As @John Warren mentioned, once you get in a property you have other avenues for the next investment.

VA backed loans are great for getting into a property. But they really are not meant as a long term investment strategy. And they are constantly changing some of the rules and requirements for using the VA loans. These are fantastic because you can end up with a property with $0 or very little money out of pocket. And no PMI. But if you use it over and over the origination fee that gets added to your loan keeps going up. That can bite into your appreciation and cash flow. There are plenty of things to think about. It is very doable though. Let me know if you have any questions.

Explaining your background/experience does help see where you're coming from. I do like the argument.

On your numbers, you keep comparing the one security deposit to the total annual move-in fees. Is there a reason why the rest of the security deposits are not included?

Let's see if a newbie like me is understanding this correctly. So if we keep the same numbers going:

62 units @ 20% turnover rate = 12.4 units/year * $500 move in fee = $6,200 annual move-in fees.

vs

62 units @ 20% turnover rate = 12.4 units/year * $1,500 move in fee $18,600 in annual SDs.

I love this conversation. It proves that no two experiences are exactly the same. 

If I may devil's advocate for both sides (security deposit vs move-in-fee);

I am a numbers guy so I love what you have illustrated @Jason Albasha. It can make sense to secure 1/3 of the money instead of returning ALL of the security deposit. A couple sayings come to mind: "A bird in the hand is worth two in the bush" and "A dollar today is worth more than a dollar tomorrow". Having that move-in fee and being able to put it to work for you from day one is a nice option to have.

On the other hand, we shouldn't just downplay someones proven record. @John Warren seems to be saying that from, his experience, his renters have shown that having a security deposit looming over them has motivated them to leave the unit to a level that is required. I wouldn't say that he is "assuming tenants will do less damage". I would say his tenant base have shown that they do care about the possible $1500 being lost if they don't leave the place spot less. I would assume most people that are only paying $1000 for rent aren't the kind of folks to want $1500 to slip away from them (no matter whether they are good or bad tenants).

It would be good to hear from others with experience on either side. I wonder how often someone gets a destroyed unit when the tenant leaves and there is not security deposit to cover anything. I doubt the $500 move-in fee would cover much in that scenario. But I may be wrong.

I personally have one unit with a security deposit in La Grange and a house in Brookfield being rented where I did a move-in fee. I know the people in the Brookfield house so I am confident we would have a decent experience on a move out. I have mixed feelings with the security deposit unit. On one hand I do like having that money to fall back on if anything comes up. But with all the laws and rules about how much you have to return with interest and all, it makes it less comfortable for me to hold deposits.

@Joshua Jones is the best! Happy to see him on the lineup again. Looking forward to catching what he has to say on the topic. I love that you have it in person and remote. The new spot is a bit away from the pre-COVID meetup area. Looks fun over there. Keep them coming John. 

Here is where I am getting the Final RTLO file from:

https://cook-county.legistar.c...

I was looking over the final version of the RTLO today and noticed in the Exclusions section (Sec. 42-802 A-6) that this RTLO doesn't apply to anyone house hacking (a.k.a. owner occupied) a property of 6 units or less. Am I understanding this correctly?

@Isaac S. I have gone through insurance claims twice for my rental property out here in the Chicago suburbs (Brookfield). First time was for hail damage. Second time a huge tree branch landed on the roof. Both times through the claims process went very similar for me. I got two checks each time from the insurance company. The first one was for about 75% of the repair cost. That first check needed to be endorsed/signed by all the people in title and the Mortgage company. So I would get the check. My wife and I sign the check. Then we sent it to the mortgage company. They would endorse it and send it back within a week. Then we can hand that check over directly to my contractor.

The second check from the insurance company always came without the mortgage company on the line. So only my wife and I had to sign before handing it over to the contractor when he was done with the job.

But I was never told that my mortgage company can hold any of the money while the repairs were being done.