All Forum Posts by: Andrew Stack

Hi Bill,

Sorry for the lack of response and updates here. I decided against making an offer at the time as it wasn't right. Since my last post, the price has dropped from $70k to $50k, so I think I made the right choice. However, that just furthers my view that the numbers work and I think it's a good deal. 

That being said...it is both South of Grand and East of Lewis haha Is that a hard and fast rule to not go there? Area 2-3 blocks south of this place was pretty rough, but I didn't think this block was all too bad. It sounds like Waukegan, as a city, has big development plans for the next 10 years. They want to clear out the lakefront and make it more walkable, have a beach. Any idea, have you heard of this?

Do you see Waukegan gentrifying slowly? Is it getting better or worse?

Also forgot to mention that we are intending to make an offer on it tomorrow. 

Hi Bogdan, thanks for the respionse. I apologize for the delay in my own. 

The property is nearby Great Lakes Naval Base, which is very large; in fact the largest Naval base in the United States and the second largest military installment in Illinois. Wiki page on it says 40,000 recruits pass through annually with around 7,000 stationed there at any given time. Upstairs tenant is in the reserves and has been there for a year and a half and has no plans to move. Downstairs tenant just moved in and is signed on a one year lease and has extended family in 3 or 4 of the surrounding houses so I believe they would also be a longer term tenant. Even beyond those, I believe that I won't run into many vacancy issues.

Despite the sellers opinion that the property needs "no work", I believe there are a number of things my partner and I would like to remedy. We are giving people and we want to make our tenants lives better with some upgrades here and there. Furnace is about 5 years old, new vinyl flooring upstairs and downstairs, and new vinyl windows. So we've got some of the big things taken care of already. Obviously we're seeking to do an inspection and have the property appraised, but I think we are in a good starting position. At a $65,000 purchase price, with a 5% 30 year mortgage, PITI comes to $700/mo with rents bringing in $1750.

What do you think?

Hi BP. Still working on timing my transition from stocks to real estate. But I'm close. What I'm looking for here is a little insight on a property in Waukegan, IL. I spoke with the owner and looked at the house one year ago. It still hasn't sold and it appears they raised the price $5k. I assume that's because he is no longer representing himself and has an agent. 

First time we looked at the property, he wanted $65,000 and had only the upstairs rented. At the time I looked at it with a friend/potential partner. Waukegan is 5 minutes from a huge Naval base so there's usually no shortage of military families to rent to. If you're not familiar, Waukegan isn't the nicest area. However, the property in question is in a pretty good location: adjacent to a garden run by the city council, less than a block from a brand new park, and kiddie corner to a church/Catholic school. This is my first deal. I'm still apprehensive about the area, but again, just because I wouldn't live there doesn't mean no one would. Doesn't appear to be many vacancies in the area and the seller is trying to get rid of his entire portfolio and move to Florida. 

So here it is: 

Asking price: $70,000

What I intend to offer (if I offer): $45,000. I could do all cash with perhaps some help from family (less than $15k) or friends/partners (one has asked me to find something he could join in on with $20k, the other serious one has about $35k-$50k to invest with me). 

It is rented, top and bottom, for a total of $1750/mo on new(?) leases.

The only work I think it immediately needs is fixing the back steps and a few roof repairs. Nothing that would break the bank. Now I'm not an expert and have not had it inspected or appraised yet, so I could be wrong and it might need a complete tearoff. Or a new furnace. BUT...

As it stands, the numbers look damn good to me. Is it the nicest house I could get? Absolutely not. But I wouldn't have to finance and could potentially do the whole deal myself, which would be nice. What are your thoughts BP?

What?? What are you talking about? How in the world would you draw that conclusion? Chicago, NY, Philly are doing nothing but growing...As is the entire rest of the United States...I bet you think Ebola is going to kill off half the populations of all these cities.

Wendell, I'd love to come meet some BP'ers but lunch in Downers Grove isn't really an option for me as I assume a lot of us still with day jobs. I can't tell you how appealing Giordanos sounds though!

Ravenswood Title

@Tricia Haggard wow, well those are some strong words haha Well, what if the price all-in was $35k including the back taxes? Plus it'd be owner-financed. I think we are going to take a look at it this Saturday. Another thing to consider is there is a 1 year lease in place with 2 families (that are family), just had a new baby, and signed a new 1 year lease one week ago so that's guaranteed cash flow for the first year here..

@Edward Burns Thanks for the insight on the airport and the burbs down there. It sounds like the airport may or may not be happening as it's kind of been in limbo for years. A friend of mine that I will be partnering with on this (or future deal if this is a no-go) went to Valpo and told me about the upcoming Illiana Corridor highway. It will be passing within about 10 miles or so of Kankakee and construction is either already started or is starting soon. Would this be a solid driver for growth and appreciation in the area? More jobs, etc is what I feel.

@Edward Burns that's very interesting, can you tell me more? I haven't heard anything about it but that seems like it'd be a good driver for the local economy and would force appreciation better than I could! What else would you like to know?

@Tricia Haggard it's in kankakee which is right next to you it looks like! What can you tell me about the area? Does this sound like a deal for the area? Two 2 bed/1 bath? I'm not sure what to offer since there's that $12k in back taxes. I hear taxes for the area are pretty high?

Another issue I have is he said the property was vacant for 3 years. I believe it was prior to renovations and also a drop in rent, but any way I cut it the deal looks good lol so please tell me what, if anything you see potentially wrong here.

I'm looking at a duplex I just found today about 30 min south of Chicago. Not quite the suburbs but a decent town. Seller is asking $35k but the property also had $12k in back taxes due. Obviously the taxes have to be taken care of before we assume ownership. Both units are rented out for a total of $1050/mo. Taxes are about $3200. The tenants pay for all utilities and apparently are great about paying rent and also do all maintenance (lawn, garden, snow, etc) which makes me feel better about being an hour and a half away but I know a PM isn't out of the question.

When I asked, the owner said he would be open to owner financing with a good down payment. I believe he is going to be pretty amicable given he has medical bills due and just lost his job. He also said he put in about $40k in renovations like kitchen, pergo floors, bathroom, roof, etc over the past 2 years. Given this, what thoughts does the collective conscience of BP have for me? Good deal, bad deal, no deal, what would you offer?