All Forum Posts by: Chad Gilchrist

Long story short my husband and I are meeting with a couple after church tomorrow who are entering retirement and starting to sell off their portfolio (multi-families / single-families in Batavia, Geneva, St. Charles area). They’re in-laws of a work colleague.

Anywho, we’re looking to make an offer on one of their 2-flat properties in Batavia and are trying to run comps on it before we meet with them tomorrow.

Wanted to check in to see if anyone with access to the MLS would be willing to run this through for us? Since this is would be an off-market deal, we're trying not to bring realtors in, but of course would be willing to compensate anyone for their time!

Here is the property listing: https://www.zillow.com/homedetails/3-S-Lincoln-St-Batavia-IL...

Current owners are asking $400k.

@Tom Shallcross and @John Warren - thanks so much you two! Where do the new leases get posted to?

Hey @Tom Shallcross and @John Warren - are you able to DM that to us as well? Are we still operating off of the 2022 Chicago Lease for 2023? When do they typically release the new year's?

Hey BP fam! We just closed on our first multi a month or so ago and was wondering if anyone in the Chicago market has a lead on a solid electrician who has experience working in older buildings. We went to change a light fixture and found the old cable to be semi-dry rotted and don’t want to or have the time to pull new cable/we would love to have a professional look at it. And there’s this stupid gas line right there thats capped that we’re fine with but we have to work around! Next time maybe we'll get a newer construction building! 

Thank you all so much!

Thank you! You confirmed what we were thinking. The seller called back today and said he talked to a tax guy and everything is good. Close is on! Thank you!

Hey BP hive mind! My wife and I are supposed to close on a multi unit (zoned as a 2 unit with a legal 3rd & bonus unit/in law) in Chicago tomorrow. Yesterday the seller (an older man who has owner occupied the property for 21 years) called us and told us he might have to back out of the deal because he’s worried about taxes. We know that we can get into the legality of backing out at the closing table, but before that, we’d really like to ease his mind (the advice he’s getting we don’t think is from a qualified professional) and to make sure that my understanding of the sales tax is correct so:

-He bought in 2001 for 185k

-Refinanced in ‘06

-Took a HELOC out a few years ago for rehabs, but stopped paying it (as well as his mortgage) when he fell on some hard times and had some major medical bills. Principal is 70K, interest is 30K for a total of ~100K

-He owes $265K on the refinanced mortgage

-Agreed sales price: $440k

So that would make him in it for 365k. The advice he received is that he will owe taxes on the difference between the sales price (440) and the original purchase price (185), which would subject him to capital gains. My understanding is that you’re taxed on the profit (so 440k-365k = 75k).

Additionally, my understanding is that because he bought it as a primary residence and has lived in it 2 of the last 5 years and is single, that he wouldn’t be subject to any cap gains for the first $250K in Profit, which again, takes into account how much he still owes on the property. 
Beyond that, my understanding is that he can tack the 100K in HELOC costs—or at least the principal—to the original purchase price as capital improvements because he used that HELOC to improve the property. which would make him not liable for capital gains either.

Is this correct? Any advice/help would be so greatly appreciated, as my wife and I are very nervous about this closing tomorrow, and would love to have our minds eased and for understanding!

Thank you!

Hey @Robert Hursey! I know this post is over 5 years old, but my fiancé and I are currently looking into (what sounds to be) a similar opportunity that you and your parents pursued. I'm wondering if you'd be willing to give an update on how everything went down? If you'd be open to chatting about this over the phone, we'd be super appreciative. We plan to speak with real estate attorneys on all the legalities, but I think it'd be helpful to hear from someone who pursued this successfully in Illinois. Let me know!

@Kevin Baque hey Kevin! We’re interested in doing the following. Have you found anything out since this post?

Hey Kasey,

Congratulations on the FHA approval and for taking steps to get your first place. Realestate prices are insane right now across the board, so I understand where you're coming from. We just purchased a 4 unit (legal 3 + 1) in Chicago that we are doing a house hack with. The bonus unit needs a lot of work, so we ran our numbers based off the rent of the 3 other units. With this market, I think a complete living for free househack is not likely in a lot of areas, so what we did is lower our costs of living. I was paying $900/mo in rent, and my fiancé was paying $800/mo for her rent, so if we bought a place where we have to pay less than $1700/mo we'd be doing some big savings. So as it stands, if we rent out the two units, we're looking to pay $300/mo which allows us to put the other 1400 into our next property. I think that's the best way to look at a house hack right now—it's not about doing the "perfect" hack, just like some BRRRR's leave some money in the deal. Sometimes the pursuit of trying to find the perfect makes us not take any action at all, when REI is about learning how to get better and better with each deal if that's any encouragement.
That said, if you're really okay with putting in the work to find deals with possibly better numbers, I'd recommend getting a good realitor who works with investors and is hungry to make some moves, and sites like Batch Leads to find properties that have maybe been inherited or didn't sell previously for whatever reason. Also finding places that are FSBO, in our market there are flat fee brokers that will list these places on the MLS. Perhaps you can contact someone there and get a list of every FSBO or find out about ones before they hit the market. I hope that helps!

@Dave Mays Hey Dave! Following this thread and wanted to check in to see if you've been able to connect with any agents in the area?