All Forum Posts by: Connor O'Brien

Come to back of the yards! 

gotta be careful not to over rehab because ARV is gonna be a lot lower but you can definitely find good properties for under $100k. I just did my first house hack in 2018 by 49th pl and Racine- I'm super happy with the neighborhood and the deal would have worked as a BRRR.

Check out back of the yards coffee shop by 47th st and Ashland.  I swear this neighborhood is a gem

A lot of the really good deals need a lot of work like Tom said. 

Termites are a thing here in Chicago! I've even seen brick buildings with joists and studs completely eaten

Top unit is a 5 bedroom section 8:) if you listened to the podcast today

@Nick Scapellati I completed a HUD203k rehab about a year ago. I still live in the property and love it! I bought the property for 130K, my loan is 168K and I just had the property appraised for 185K! Not a slam dunk by any means but definitely a solid first deal. 

I would definitely take @John Warren's advice as he is an extremely reputable agent in the area! I definitely agree that the loan is fundamentally flawed because you have to have your entire scope of work afteryour first walk through of the property (you - like me will probably miss a lot). Like most rehabs my scope of work changed a lot - unfortunately that scope from your initial walk through is part of your underwriting for the loan and you have to sign it saying it will be completed. 

I got around this by having my contractor pad his numbers (I used LUke Kotulski from get inland - DM me for details). As you can imagine this was a lot of risk because I essentially signed a document in my mortgage saying I would pay him exorbitant amounts for things. So like @John Warren said trusting your contractor is crucial. 

The best part is the money from your rehab that you dont use gets paid out to you. I made the mistake of having most of this pay down my mortgage ( I would definitely take all cash if I could do it again)  but I did get a check for about $3K - actually paid back from contractor (again trusting this guy is key)

I have some before and after pictures of my rehab on my page! DM me if you need any more info - having a good mortgage broker is also key because this loan is going to take forever between getting quotes and completing all inspections I think mine took about 6 months to close 

Get a quote from a local insulation company for removal and use this in your negotiation.  After you close hopefully John is right and you just cover it adding thousands to your profit! There is a test they do on the air to ensure no asbestos has been disturbed- they draw samples of air and test it fit fibers.  If you go the abatement route you can always have this done a couple times during construction and then upon completion - having a licensed company quote removal will definitely give you some leverage.  I'm not a lawyer but I'd say you don't have to disclose getting a quote to remove something you think looks like asbestos. If you test the air when you are done that should prove you aren't putting anyone at risk. 

petrochem insulation does asbestos in my area.  

@Robert Regis I'm in new city right outside of McKinley park. My favorite park is by this coffee shop:

2059 W 47th St, Chicago, IL 60609

As far as tenant base... despite what people say I haven't heard of anyone having issues finding tenants in Chicago.  My tenant pays 1275 for a 5 bedroom in new city.  

I bought my first house hack in back of the yards a little over a year ago.  (Couldn't afford McKinley park) people laugh when I tell them what neighborhood I live in but I feel safe and it has a great vibe.  Tons of duplexes for under  $170k. I did the hud203k loan which includes re hab to add even a little more value.  

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $115,000
Cash invested: $20,000

5 unit brick building in Gary right off Broadway.

What made you interested in investing in this type of deal?

High Cap rate

How did you find this deal and how did you negotiate it?

Armand investment group

How did you finance this deal?

Syndication

How did you add value to the deal?

Took care of Deferred maintenance.

What was the outcome?

Safe healthy place to live for residents

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Armand investment group

I just used  Randall Raines (insurance by Raines) for a 5 unit in Gary. He's extremely knowledgeable and involved in local investment groups.  

DM for email and phone

Extremely helpful!! Thanks