All Forum Posts by: Alex Linden

@Jonathan Greene has some excellent points above. I did want to reach out though as I also moved into the area around a year ago and can say that South Bend has an excellent local REIA. I'm not super experienced and am just getting my feet wet in the area, but there are plenty of active investors that are happy to discuss options and help newer investors out.

We just had our July meeting but have one each month around the 3rd Thursday of the month. Here's the REIA website link if you have any interest in networking https://reia-nci.clubexpress.c...

No worries, it's not a pitch-fest type REIA, just somewhere to hang out and talk investing each month!

-Alex Linden

Evening all! Thanks for the tag, I've moved to Indiana recently but depending on the time & date I'd love to get together to chat sometime so definitely keep me in the loop.

While I was in DeKalb I flipped a pair of homes on the south & southeast side and was a PM for a local company for several years. There are some great areas in the 2 towns, but also definitely some areas to stay away from. Hit me up if you'd like to chat or if this gets rolling again. It's been a long time since I have been on BP but would like to get active again.

-Alex Linden

5-Day notice should have been given as a gentleman above mentioned shortly after the first non-payment of rent, if unable to serve for several days, he should then have been clued in that something was wrong. Then proceed to give the tenant notice via voice-mail, e-mail, text, etc that you will be inspecting the unit 24-Hours after said notice. On inspection, all of these things could have been realized prior to waiting the 2-months. From there, consider the unit abandoned and file eviction/damages. Of course it depends in part on the lease signed with the tenants. 

In no situation ever should a landlord or PM go 2 months without payment of rent or at the very least hearing from the tenant. There are no exceptions to this. Kindness of the heart and confidence in human decency have virtually no place in this business. Be Firm but Reasonable, Pro-Active yet not Pushy. Hoping for other people to do the right thing is one thing, relying on it and basing your business off it is another matter entirely. This is why people go bankrupt and get burned in the business.

Zillow has been making changes leading in this direction since early July of this past year. Regardless of whether it is currently limited to 3 states or if it will be nationwide come February, you can read the writing on the wall. It is coming. This will have an impact across the board because the small mom & pop rental shops will not be budgeting their marketing strategy and lose their cash-flow on the $40 a month new Zillow cost per SFR. The Commercial guys running apartment complexes will hurt because many of them advertise hundreds of units on Zillow year-round regardless of whether they are vacant, we seek the exposure so the phone keeps ringing for when they become vacant. Working with landlords in excess of 150 units within 20 - 25 buildings, that comes out to around $1,000 a month in additional advertising cost if you advertise 1 unit per building.

It makes sense why people are going to get upset over this, it's a pretty big move. As investors, we need to come up with effective solutions and advertisement budgets (which should be a part of your numbers regardless of what market or property count you are working with) to take care of and adapt to things like this.

Some things to consider which so far as I can see have not been brought to light -

How will this affect syndicate feeds like Propertyware, Buildium, and Appfolio?

How soon will this be moving nationwide (it will, give it time)?

Find the Advertisement loopholes where possible and exploit them, if there are none, change our marketing strategy to prepare for this excess expense.

-Alex Linden

The Essential Realtor

Ahh yes, that makes more sense if that is what he was referring to. My above mentioned statements refer to Real Estate Property Taxes, not so much on the income tax side. The Property Tax gets the new landlords in our area every time unfortunately! Rough stuff.

@Austin Tondreau

In my experience & the experience of the Landlord group/management group I work with that's definitely not the case in my part of the state. Sure, there are definitely tax breaks in the rental market, but it doesn't come close to covering the $260,000 a year Tax Bill for ~150 units. I'm not saying you cannot make money, you definitely can. My landlord's LLC makes 10 - 15% of the rental income in Cash-Flow across the majority of the portfolio (some properties of course perform better than others); but you certainly won't get rid of these tax bills even with a superb CPA. Every year we have to budget between 2 & 3 months of pure rental income to pay the tax man, usually closer to 2 months' worth than 3 regardless of tax breaks.

If you know a CPA that can improve on that, we'd be happy to give him more business :D

-Alex Linden

The Essential Realtor

@Account Closed

I am from the DeKalb area, approximately an hour west of Calumet where you are looking into. I am of the firm belief that you can make reasonable money on multi-family in any area so long as you buy right and aren't in a super rough area of a city/town.

The Laws in Illinois can definitely be strict towards Landlords, but so long as you have a solid PM who doesn't defer your property's maintenance and is willing to shoot straight with you when problems arise as well as does things by the book, you won't have serious problems in that regard. I currently manage about 180 units in the DeKalb area and while the eviction process can be trying (if ever needed), having superb tenant screening processes and systems removes many of those issues. It's very rare for us to have a situation get that far due to our vetting process and I think that's the best way to do it as it avoids getting involved with the strict tenant-friendly policies of the state. I don't know much about Cook County, but I have heard horror stories of how anti-landlord that particular county is.

As to the taxes, well yes they are quite brutal and generally you'll average between 2-3 months per year in rental income to pay the tax man. However, if you can find a solid deal that still cash-flows after that, then you are in the clear. It's all in the numbers in that case! 

Happy to reach out to a couple PMs I know that may do business further east than I do. I'm not 100% sure if they go into the city itself though. 

Good luck sir!

-Alex Linden

The Essential Realtor

Welcome to BP Sergiu,

It's a superb site, the best around for learning and getting connected. The BP Podcasts are Legendary!

If you have any questions or need anything be sure to post and ask. I am a local Realtor & Investor from not too far away in DeKalb, IL. Happy to check things out if you need anything, curious to see your numbers as well. Love to analyze properties :)

Good luck sir!

-Alex Linden

The Essential Realtor

Welcome to BiggerPockets @Charniece Polk

I've been on BP for several years now and can honestly say it is the best source of information around. I am a local DeKalb area Realtor & Property Manager and am also getting moving building my business in the area. While I don't post a lot on here, if you have any questions about areas outside of the city, just drop me a line. Always happy to help!

I would also advise caution on jumping into the Illinois Market with Buy & Holds. I think there is always potential for that strategy in most markets but my suggestion would be to hold off unless you find a truly superb deal. Prices are still on the rise, and if Buy & Hold is your plan, perhaps do some more research, get that license, and wait until the slow-down that is on the horizon (slow-down, not crash).

If you do decide to jump in on a Buy & Hold deal, just keep in mind, on SFRs you will spend 2-3 months of your Rental income on average on Taxes in this state; there are opportunities out there, but you need to look hard for the right buy and remember it's all about solving problems!

Good luck!

-Alex Linden

The Essential Realtor

Good Evening everyone!

I am looking at purchasing a 3-Unit Rental property near a local State College. I have a few short questions, and I also thought I would post some numbers and ask for a little feedback and input on it.

My main question at the moment is about the ever dreaded Illinois Taxes! The property was purchased by the current owner way back in 2006 for $227,500 and has a whopping Tax Bill of between $6200 - $6400 per year. As I understand it's current Assessed Value, it's still to this day being taxed on that $227,500 purchase price, or very close to that. I intend to purchase it for $185,000 or close to that number and properties in that price range in my area are being taxed at approximately $4700 - $4900 for the year. If I were to purchase it, does anyone have a reasonable estimate of how long the change in taxation should take? I understand that they assess properties once every 4 years in my area, is there a way for me to petition based on the new sales price to have a reduction in taxes? Thanks guys, I've done some research in the area, but some of it can get pretty complex!

Here are some numbers for the place (Monthly)

Gross Rent - $2495

P&I - $820 Based on a 30-year, 25% Down Fixed 5.7% Mortgage

Taxes - $533 (At current Rate)

Insurance - $305 (Near a Flood Zone)

Budgeted Maintenance - $160 (7%)

Budgeted CapX - $120 (5%)

Vacancy - $94 (4%) (Think I am overshooting here as it is walking distance from the college)

Turn-Over - $45 (2%)

Monthly Cash-Flow - $418

What do you all think? Thanks for your input!

-Alex Linden