All Forum Posts by: Alexander Chavez

@Dave Toelkes this is my primary residence, I am house hacking so I rent the 2nd floor and live in the first.  Conventional financing is not an option for me since I just bought my current residence 2.5yrs ago and still owe around $150K (unless you know a way to use conventional financing while already having a home loan?)

@Jack Edgar jr Yes I am also in Jefferson township. Thanks for the info, if you find the article please send it my way!

@Brie Schmidt When would be the next chance I have to appeal?

As far as the assessed value by Cook county, what does this really mean?

Does this mean my property is valued at that amount?  Would a REA or appraiser use this value for determining their number? I am also interested in finding out how much my home is currently worth in the mind of an REA or appraiser, as well as similar homes in my area.

I plan on using leverage from my current property to invest in my next project. I have about $100K (possibly up to $130K) that I can access through a HELOC loan. I have a few ideas on how to get the ball rolling with this, but would like to hear others ideas on how I can use this to invest on a flip in Chicago.

Currently living in a two flat in the Avondale neighborhood of Chicago.  I purchased in 2013 for $175K. My property got an assessment of $315K by cook county (increased from $250K to $315K in 2015).  Last year I paid about $5K in taxes.  I have a few questions

1. Should I appeal the assessment amount, if so how do I go about it?

2. What will the be the tax increase I can expect for 2016 and when will this become effective?

@Logan Hicks

and all BP members who wish to join on this discussion

Thanks for the feedback.  This was more of a general example to get an idea what the best split would be for each partner.  However, if you don't mind I would like to discuss and analyze the numbers, here is how I ran my numbers. (based off 6 months)

Escrow =$3k ($5k tax/yr and $1100/yr for insurance)----partner 1 pays

Utilities= $1,100 ---- partner 1 pays

Mortgage = $5100 ($850/mth) --- This is the only payment partner 2 will be making---

5% down payment = $8750---partner 1 pays

Interest only payment on HELOC = $230/mth = $1400 total---partner 1 pays

Purchase  costs- I estimated $5K for this, which in a lot of cases can be covered by the seller. (this will cover any buying REA fee and closing costs, am i misinformed on this cost?)

Selling costs- I have asked around and have been told to calculate 6% of the sell price for this, at least in Chicago (anyone care to provide some feedback on this? is this correct or maybe I was misinformed?) so 6% of $300K = $18K, then i added another $5k just for fluff(for the overall project) so have a total of $23K----partner 1 pays

Rehab costs- I originally planned to estimate $50K, but decided to add another 20% to this for unexpected repairs that can occur. total = $60K---partner 1 pays

With a purchase price of $175K and a sell price of $300K it will leave me with a profit of about $27K to be split between the two partners (whatever the agreement ends up being)

As far as your statement that $300K is asking too much, I would have to disagree. At least for my target areas in Chicago (Avondale, Logan Square, kilbourn park, portage park, cragin, and belmont craigin neighborhoods). This ARV for the areas I am planning on focusing on I believe are realistic (anyone wish to confirm/refute?). Depending on which neighborhood the property is in it can even sell for $350K or $325K but i decided to low ball it and say $300K for now. I am not a REA but have concluded this from my research and asking around.

This is also dependent on what type of property it is. I will only look at a place with the following minimum requirements 1200sqft and at least 3bd/2bth. This can allow me to obtain either a SFH or a two-flat (chicago term for a two unit multi family home). However, in order to acquire the property for the price of around $175K it will most likely need to be a distressed property(might even be able to find a plae for around $150K). The trick is going to be to find one that is not too distressed that a bank will still allow us(partner 2) to take out a loan on it and not have to pay cash for it.

Now, I have a few questions in regards to the profit split.  So far on this post many think a 50/50 split seems fair.  I would like to understand why they believe that?  I personally think partner 1 has more in the deal.

Partner 1 will be putting in 94% of the costs in actual cash and managing the project.

Partner 2 will be obtaining a loan to acquire the property and only need to pay the mortgage payment ($850/mth) until the project is complete.

Hello,

I am based out of Chicago.  Was hoping to get a few thoughts on what would be a fair agreement for a possible deal with a partner.  We'e already began discussing and seems like it will be happening soon.  The plan would be to do a fix and flip within 6 months (hopefuly less but worst case 8months).  The following would be what each person brings to the table.  The deal will be based off the assumption that we would have the following figures

Purchase price $175K

Rehab Costs $60K

Sell Price $300K

Estimated Total Profit (after all expenses including selling costs) $25K-30K

The goal of this partnership would be to allow partner 1 to build capital for future flip and flips and start their LLC after this deal. For partner 2, they want to buy a home soon, but do not have money for the down payment, this deal will help them earn $ to use for a down payment on a home after this deal is complete.

Partner 1: 

• Will utilize a HELOC loan to cover down payment, holding costs(utilities), rehab costs(estimating $60K-rehab) (estimated total HELOC of $80K-100K, but will have access to about $125K)
• Will manage the overall project and obtain and manage the contractors and RE agents
• If necessary will also cover mortgage and escrow payments- also holding costs

Partner 2:

• Will obtain loan from bank to purchase home- (can obtain a low down payment 5%, no PMI,)
• Will pay bank mortgage loan monthly payments (estimated $7K total)

Hope this is enough info to get the basic idea, otherwise please ask to help fill in the blanks of anything I may be missing.  

What would you think would be a good/fair way to split the profits?

@Ed Matteson 

@Brie Schmidt

Thanks for the response!

I agree, I can probably better utilize my time to generate more profits in other areas since my time will be limited (work a full time engineering job). I would still like to obtain a RE license more for the knowledge I can gain from it, just thought if I have it why not use it. Also, it would give me access to the MLS anytime I want. Do either of you operate or recommend any agents (buying/listing) that are familiar with the northwest chicago land neighborhoods, basically anything North of Fullerton Ave as far north as Peterson. (I live in the Avondale neighborhood and would like to target my surrounding areas), looking for distressed properties in these areas.

@Bob Ewoldt 

@Brie Schmidt

@Jerry Stanford

@Ed Matteson

What are some thing you would think it is important to know before I decide to go this route.  I've heard there are fees associated with having a real estate license (to the state, and a brokerage firm that I would have to become part of?) if I actually want to use my license.  What would these be and how often, or any info you can provide to give me an understanding would be greatly appreciated!

Here's a little description of what my plan would be. My main goal to start with would be to use the license to sell my own fix and flip properties after the rehab is complete ( save money in the cost to sell = higher end profit). Also, having access to the MLS so I can evaluate the market to determine property values and find deals.

It would be nice to use it to help friends and family search for and purchase/sell homes. (but not my main goal at the moment) 

I am looking into different ways of obtaining a Real Estate Agent License in the state of IL (I live in Chicago).  I work a full time job as an Engineer so I would prefer something that I can do online at my own pace and schedule.  Anyone have recommendations on sites/companies who offer such?  Also, any pros or cons into going this route?

Hello,

I am looking for some feedback/recommendations on online or flexible Real Estate license courses that people have used.  I am located in Chicago, so it would have to be one that allows me to use it there.

Also, what are any pros and cons of obtaining my license?

I plan on doing flips in the Northwest side of Chicago (the actual city and not any of its suburbs) to start.

Overall, I am not planning on becoming a buying or listing agent, I am just trying to use it so I can have access to the MLS in my area so I do not have to depend or wait on an agent to bring me listings or get me into a specific property that I would like to see according to my own schedule. I also want to be able to access properties and sales history so I can use to analyze my deals before I make them. Unless someone can recommend another way to get this, thought I would start by looking into this?

Thanks!