All Forum Posts by: Brendan M.

Update as of 10/8/2017

I didn't realize it's been almost a year since I last posted. It's been an especially tough year in the market in Chicago. There just hasn't been that many multi family properties that make sense. If/when one does come up, it usually goes within a week and goes substantially over in price. Most of the properties have gone over list price -  to give you an idea, I put in a bid of $25,000 over list price and was outbid with an all cash offer. 

I also had an offer accepted on a home which was very exciting! I was getting everything in order going through all the inspections and the inspector mentioned that I should get a structural engineer to look at the property, not looking good at this point. As I was in the crawl space with the engineer, he says "this is good" so I'm thinking Great!, he goes on "well, not for you, but I've never seen anything like this so it's a good story for me" and went on to describe how the foundation is in really ****** condition and parts of the foundation had shims to support it. Anyways, at this point I knew I couldn't move forward with the property. It was unfortunate but obviously I'm glad I found out before I moved forward with the purchase. 

So where am I now? I'm still looking for my first property. I was really hoping to have purchased two properties in 2017 but I have to keep in mind that real estate is a long term goal, and it's always better to wait for a good deal than hop into a bad deal. With that being said, I'm starting to lower my requirements for cash flow in Chicago. I want to purchase 2-3 multi family buildings in Chicago (9-10 units) and start building equity as quickly as possible. Once I do that, I'd like to use that equity (plus additional savings) to purchase multifamily in lower cost MW cities. 

Also, I'll try to update this a bit more. 

Hey Anne, I'm currently looking to do the same thing you are. I've been looking on the Northside of Chicago for about 8 months and @Brie Schmidt has been an incredible resource! If you have any questions, feel free to PM me. 

It would be on the north side. Maybe wishful thinking on my part but I'd think out of state owners might sell because they are having trouble with tenants, in general sick of landlording, not getting enough returns on their property (because of mismanagement). I understand that it's definitely a seller's market currently but just trying to think a bit outside the box and see if there are any other options I'm not considering. 

Thanks @Rosston Smith

So bad news but we ended up pulling the offer as things weren't as described for the property. I was weary when I had to make an offer sight unseen but in the end I've learned a lot about the process and I am excited about finding the right property. 

Hi Everyone,

I have recently been looking on the MLS in Chicago for 3 unit properties to purchase. I had an offer accepted but that ended up falling through. I was wondering if anyone has had success finding off market properties through the assessor's office or through different avenues.

My hope is I can find properties that aren't necessarily for sale but that an owner would consider selling for the right price. I'm in the very preliminary stages of this idea but I was thinking searching 3 unit properties with out of state owners or something along those lines. I guess that's what yellow letters are for but I'm actually looking to live in one of these units and rent out the others.

Thoughts? Opinions? 

Hey Robert,

Welcome! I was actually in the same boat as you as recently as a couple months ago. I started reading a ton of books and was on the forums quite frequently soaking in all the information. Just recently, I agreed to purchase my first property so going through all the steps now. It's exciting and I am learning as I go. 

If you have any questions, I'd be more than happy to help. 

UPDATE as of 11/3

So I met with another investor on this site for coffee and he was a wealth of information. I had slowed down at looking at properties to give me some time to save some more money and planned on looking again in early 2017. After speaking with this investor, I thought why not just see what's out there. 

I came across a great property at a super affordable price. It was only back on the market because financing fell through. I contacted my realtor and set up a showing for two days later. The next day the selling realtor said they needed a "highest and best" by 4 PM that day. I was at a crossroads because there was no way I could see it before making an offer. I really liked it from the pictures that I saw of only one unit (completely updated, although the description says all 3 units were updated) and the fact that the tenant's were already paying rent. This told me that the other units were also in good conditions and rentable. It also helped that the tenant's were on a month to month lease and planned on continuning living there. I can get through the winter months with tenants and decide from there if I want to increase rents/have them sign a longer lease. 

So I wouldn't recommend this to everyone, but I made a leap of faith and put an offer in, and they accepted! I went above their asking price because even at my offered price, it was such a great deal. I have a walk through contingency in place as well as an appraisal so if anything is askew I have some recourse. I am exhilarated and nervous all in one! I feel really good about this one and I'll keep everyone updated as to how the inspection goes. 

Thanks guys. I realize that as well. It's probably better to work on a 4-6 year timeline too which allows you to adjust after hopefully reaching your goals. Also, your goals will change throughout this time so it makes it easier to focus on the ST to achieve the LT goals. 

I've played around with the numbers so I can see the change if the purchase price goes up by $50K or if the cash flow decreases. 

@Jeremy Brown

That's what I figured as well. You're right, scaling is going to be difficult. I've also thought about it where if I am making $130,000 by 32 I'll be pretty freaking happy. I don't even know if I need to scale as quickly anymore. I can enjoy my time and do it part time and live the dream so that's part of the equation as well. 

I'm always thinking of it realistically so don't see you being a downer. It's important considerations that need to be thought of and planned for. Very true about the plan happening but that's what makes the journey fun and so exciting. 

Hi All,

I wanted to ask you guys if this type of analysis seems realistic. I have created a SS that would track the most ideal investing situation and see if others found this to be realistic/plausible. Keep in mind these are assumptions and I understand things can and do change. Instead of buying 29 new properties, I may buy one larger apartment complex. I also realize that no one is going to buy 23.19 properties. I just tried to keep it as simple as possible. 

Let me know your thoughts. 

Assumptions:

Money Saved - $40,000/year + proceeds from new properties

Cost of homes - $100,000

% down - 25%

Cash flow per month - $400/home

We can file this one under a learning experience and a lesson learned the hard way. I made an offer on a property that I really liked. I went well below asking price and they came back with $9000 off their original asking price. After speaking with my dad, I figured I'd go see the property with a partner of his who focuses on flipping homes to get an idea of repairs needed. I was hesitant to do this because I wanted to make another counter offer and get the deal wrapped up. 

I ended up seeing the property yesterday and made another counter offer. By the time, I woke up this morning they had accepted another person's offer and that was that. I tried to get a couple thousand off the asking price and my hesitation ended up costing me the deal. According to my analysis, it would have been a good deal at the asking.

I know there will be other deals out there but it's pretty discouraging to say the least. I'm upset with myself and it really just sucks. Anyways, you live and you learn.