All Forum Posts by: Brian N.

My HELOC for a 3-unit (I'm sure 4 should be okay too), is 95% CLTV with interest-only at prime+1, you're allowed to pay down the principal as well. 5 year draw period with 20 year repayment period.

They're called "First Financial Credit Union", you can google their name since I think links aren't allowed to be posted. Otherwise message me and I can intro you to the loan officer.

@Matt Said

@Ray Harrell

I have a 3-flat in the Logan Square area. My tenants moved in around September 2018 and I have been averaging 100-120 per month for the water/garbage bill. I've been told the water bill is due every 2 months, but I have been paying it off monthly since there's a monthly statement. 

@Gary Freidman

I have used Rose Pest Solutions before, they're pretty responsive and you can sign up for a subscription where they can come whenever you (your tenant) calls. For my property, 3-flat on a 125x25 lot, there was a down payment of $150 and recurring $40 per month. They come once a quarter no matter what to do some maintenance (spray exterior etc) but you can call if anything else is needed. 

I have since stopped their service since my only issue was rodents. The person who was the service person for my area recommended me another specialized handyman to actually clean up and close out a rodent hole near the bath drain. Once this was fixed I actually cancelled my Rose Solutions subscription and got a full refund since they did not address the problem. I would recommend Rose Solutions if you were looking to get some regular pest maintenance.

Here's what was on my contract:

"""

Service Healthy Home Maintenace Program (HHMP) *12 Month Agreement

Pest Covered In This Agreement Cockroaches, Carpenter Ants, Centipedes/Millipedes, Carpenter Bees, Carpet Beetles, Crickets, Fleas, Earwigs, Ants, Hornets, Mice & Rats, Silverfish, Spiders, Exterior, Stinging Insects

"""

@Olu Owasanoye thanks for checking out my post and good luck on your search! Let me know if I can be of any help

Quick update:

Got my appraisal back last Friday 11/2/18 (actual appraisal happened 10/27) at 750k!

mini recap on the numbers:

530k purchase, 5% down, 7.5k seller credit.

Cash used was: 80k rehab + 30k down and closing costs + 11.4k holding costs = 121.4k 

Current loan balance is ~502k

Looking for my next steps with @Landon Hoon on how to best use the equity gain. We're thinking the rate and term refi with a next day HELOC with access to 210.5k.

(750k* .95) -502k = 210.5k

Let me know your thoughts, excited for this to snowball!

cc:

@Henry Lazerow, @Amir Haq, @Kumar Tummalapalli, @Ibn Abney, @Albert Cheng, @Spencer Blaney, @Fernando Angelucci, @George Bailey, @Joshua Roy, @John Clark 

Check out the events page:

https://www.biggerpockets.com/forums/521-events-and-happenings

You can input your zip and how far you’re willing to drive  

Two upcoming events I’ll be attending are:

https://www.biggerpockets.com/forums/521/topics/621859-chicago-multifamily-club

https://www.biggerpockets.com/forums/521/topics/623857-chicago-investors-meetup-october

These are great meetups because you’ll meet many people in different parts of their investing journey and many are very willing share knowledge. 

Good luck and let me know if you’ve got questions!

@Fred Ewert

3. Your math is correct yes. It's an assumption though, similar to the 1% rule or the 50% rule (expenses) which both have circumstances where it's not accurate. Take extremes - you have the same exact property in two vastly different neighborhoods of Chicago. The capex  + repairs and maintenance should be similar but the gross rent might change your reserve based off percentages. I would go with the your Indy resource on the $900 per door but I would ask how to come to that number and make your decision there based off your risk tolerance.

For crime, Trulia and city-data is a good start. If possible I'd recommend driving around at different times of the day throughout the week. Your agent should be knowledgeable of the area as well. Prior to buying in Logan Square, I was looking everywhere else (West Loop, South Loop, McKinley Park, Bridgeport, Pilsen, Little Village). My agent showed me some key places to look at properties and I've been very happy with where I bought. I'd recommend getting the opinion of an agent transacting in the area. (Just read @Tom Shallcross's response after typing this - fully agree)

When you're ready to take the next steps, I'd recommend talking to an agent and a lender. They are valuable resources/ consultants that don't charge you upfront fees.

@Fred Ewert

I’ll try to answer some:

1. To get tax info I use: http://www.cookcountypropertyinfo.com/

2. This has many factors and an insurance broker can give you a better idea once you identify a property. Factors include flood zone, what the structure is made of (brick?), your deductible/ coverage, etc. If you want a recommendation, I know a knowledgeable broker who can go more into detail. 

3. Would need to know more about the building and condition. Does it need tuckpointing? How old are the mechanicals? Some people like to break down capex needs and calculate the lifespan of each item to determine amount they should be putting in reserves monthly. Others use a percentage of rental income i.e. 5% for capex and 5% for repairs/maintenance. 

4. Chicago is very diverse, I think you’ll find that a property manager might know the answer to your specific neighborhood. In hot areas such as west loop (rents ~1900+), tenants might move in back to back, whereas you might see a bit longer somewhere else. I assume 4% for my property in Logan Square (rents ~1500+). Also consider time of year and if you’re priced right. 

5. I haven’t shopped around too much but the placement fee can be the first month of rent, then 7-10%. A lot of properties have a “managed by” sign out front, you could potentially call those numbers in your potential neighborhood to ask for their service fee. As for a 2 vs 4 unit, you can ask if there’s some sort of ‘bundle discount’, but I wouldn’t expect that for one building. 

6. You can probably expect ~3%, mine was 2.4%. If you want to bring less cash to closing you could work a seller credit into your offer. E.g. 100k straight offer should be the same as a 110k  offer with a 10k seller credit. You end up financing a bit more but have more cash to rehab. 

I’m not a part of any fb groups, I think BP does a pretty good job of moderating posts to filter out unwanted sales pitches. I’ve been able to get a lot of help by messaging others here and going to meet ups to talk RE. 

hope some of this helps!

@Steve Franco

Another thing to consider is the accessibility of the spot and location. 

For example, an outdoor spot in the West Loop close to restaurants/bars can make a more than what you had projected ($150-250). I have experience with Chicago parking apps and have been able to make anywhere from 400-800 per month. Of course the apps take their cut but it makes your life a whole lot easier.

To give you a more concrete numbers:

August revenue was $712 with 60 reservations (gross sales: $970)

vs

February revenue was $421 with 52 reservations (gross sales: $566)

Above, I started in February where I did not adjust my hourly rates optimally for the area. Number of reservations were similar (Feb has few less days). I would say that the area can consistently hit $500+.

Without the expense of maintaining your portion of a garage, you're left with more margin. Tax, insurance, paving, paint, snow removal and etc shouldn't give you huge emergency repair fees.

@Amir Haq

Landon is my guy for this, however, 95% CLTV is only for primary residence. For non owner occupied you're looking at 70-75%.

@Landon Hoon