All Forum Posts by: Bob Crane

As we look at summer 2019 I thought I'd see if any thoughts have changed on this thread.

Crain's offers a list of companies moving from the burbs downtown (McD's, of course, and others), there's the food incubator stuff on the west side, and Pullman seems to be going crazy.  But does all that counteract prices going up, taxes remaining high, and rents beginning to flatten?

45 of the 50 alderman posts are up for re-election.  Chicago is also looking at a new mayor.  How soon before these changes impact housing?

Over the years a 10 unit in central Illinois comes on and off market (I'm posting a link from the last listing).  Here are the details:

• 9 Units in Apartment (5 2bed, 4 1 bed)
• 1- 2 bed house on property - it is a strange house.  The front door faces the back door of another house very close to the lot line.
• Average rent $400 per unit
• Currently only 3 units rented (landlord had been clearing people out thinking the new landlord would want to get own tenants).
• Single owner who has pulled most of his equity out in loans.
• Was always asking $145k.  He'd accepted an offer of $120k before the other buyer pulled out.
• Link to Zillow Listing

I know he's had quotes of $30k-$50k to put a new roof on and repair some structural damage due to neglect.  I also know there are termites and cockroaches in the place.  I own a property next door and do regular termite/roach extermination because of the flow from this building.  It's a slumlord type situation - but a lovable slumlord that gets along with the tenants.  He knows the apartments are survivable at best and they know he's the only person that will rent to them.

Each unit will need to be renovated - some structural but all are to modernize.

Local landlord tells me no matter what a person does this place will always be a $450 per month per unit rental.  It is a great rental town and there's confidence it will stay occupied.   Finding contractors in the town takes a lot of work.  There are good property managers in town.

I would want to bring it at least from the Class (D) that it is to a Class (C).   Rents would average $450 per month and I would want it managed by someone else.

Wondering where you'd be on numbers.

Also wondering what kind of timeline you think my money would be tied up before I was at least breaking even while the rest of the units were rented out.

FYI - This duplex came on and off market 3x (due to people not realizing how much work was involved).  It eventually sold for $90k.  In that market after repairs it will still cashflow well.  But it would have had me carrying too much debt (plus not having any equity) and I don't want that hanging over my head.

Thanks for the advice.

Does anyone know much about properties on the lakes in central Illinois?  I started looking at lake access homes in Central Illinois.  My hope was to have something that wouldn't break my bank and also possibly generate a few AirBnB opportunities.

Lake Sara is out of my range (cost wise) and Shelbyville doesn't have anything really like this.  So i started looking at Lake Mattoon.  Are there others?

Here are my questions regarding Lake Mattoon (Negoa).  Are there any gotcha's with buying on this lake and is there any hope of someone wanting to rent the place for a vacation or access to the colleges?

If I decided to simply rent it out to a traditional tenant is this a good model as well?

Plan is refi after it is rent ready. This would be my second BRRRR if accepted.

Definitely not going to offer asking price.  Realtor concurs that the bank is dreaming.  This was typical during the bust - they are out of state looking at a screen with no idea on the condition of the property.

As for rent - it is a hot rental town.  $850 is middle of the road for a 2/1 without a garage in this area.

Foreclosed Duplex in a small town.  Class C.  Each side is a 2/1.

List price - $101k

Rehab costs - $35k

ARV - $130k

Taxes $3650 annual

Requires flood insurance.

Rehab time - 60 days

Rent possible - $850 per unit ($1700 total).

It's under Fannie first look for 5 more days.  So it's unclear if there are any other investors looking or not.

What kind of offer would you make?

Finally got my first rental ready to be rented.  Biggest thing that scared me was finding a qualified tenant.

Old School - Talked to 3 landlords in the town who said it has taken then up to six months to get tenants the last few years.  Their method - 

• Sign on the lawn
• Tell the people you know
• Let the local real estate agents know
• Take in apps
• Deny, deny deny until you kiss your prince. 

(about 10-15 contacts over six months).

New School - Posted it on Zillow and Facebook Messenger.    At least 60  inquiries in first two weeks, 3 got to background check/application, 1 qualified candidate signed a lease in week 3.  Most of my candidates came from out of town and would have never seen the sign.

Their tenants drop personal checks or cash of at their door.  My tenant prefers ACH and likes the auto-notify/receipt from tenantcloud.

This is a very small market.  Almost everyone under 40 goes online for their info regardless the community demographic.

Might be late but someone asked about Allure vs the others.  The original Allure (without the "Ultra," "Isocore," or "Lifeproof" name) is very thin and WILL NOT stand up in a rental.

We installed this in our home in 2008.  We have to set down cardboard/wood when pulling out appliances and it is very susceptible to scratches.  Looks great when it goes in but you have to be super careful to keep it that way.

I installed Allure Ultra in my last remodel.  One of the subs dragged boards across it and stacked two full five gallon buckets of paint on top of each other in a room.  Quick wash and there wasn't a scratch from the board and the weight of the paint didn't make a dent.

Certainly agree with the sentinment of looking at this as a marathon, not a sprint.  What I'm seeing now is a market that is in a full sprint up.  90 day old comps are useless.  30+ day comps are starting to look on the low end compared to what closes today.  Only access to that new of data doesn't come easy.

I guess a better question is what you evaluate your numbers against in a boom market?  As the markets gone up slowly coming to a number hasn't been difficult.  But at this break neck pace it feels like I'll often be just $10-$15k away from closing the next one.

I should also add this is the peak season of the year for real estate in Chicago.  Slow down is late fall through Feb.  May be that I simply evaluate through the summer and prep for then (unless a "too good to pass up" pops up in my face).  Of course I'll kick myself for every missed opportunity.  :-)