All Forum Posts by: Darrell Essex

Quote from @Jonathan Klemm:

Hey @Zeliang Zheng - I'd recommend Chicago, but I am of course biased.  

There are houses at all price points and tons of multi-family properties that need to be rehabbed, which makes them perfect for BRRRRs.

Eeee I dunno the rents don’t mesh with the prices that well and suburbs taxes are ridiculous. Seems like the agents have the prices right spot on to where you break even if you rehab it and if you break even why would you brrrr it when you could’ve left less in by buying a ready to go property outright. (70% cash out equity vs 20% down conventional)

I would start relatively close. Just because if you need to get over there you don’t want to be going from Maine to Hawaii (extreme example I know). Like I’m in Chicago, I have Indiana, Wisconsin, and Michigan pretty close and Iowa and Missouri not that bad either. I just started expanding my search to Indiana and Missouri. 

Quote from @Derek Schetselaar:

Hey Jaron! It looks like it's takes affect in April for Fannie Mae and March for Freddie. Close quick haha. Nice job sneaking in last second. 

Right? I got so lucky my current project closes March 21. When my lender said we gotta get it done because April it goes to 12 I almost fainted. 

I’m tossing out my Fannie Freddie lender and going straight with the lenders I get my rehab loans from. 12 months is crazy, that murders business right there. It’s a little bit more expensive of a loan but the train keeps pushing forward and we aren’t pushing cows off the tracks. 

I would lvp the house if the floors need replacing. Get the waterproof kind if it’s in budget because it can be used in every room and keeps it clean throughout the house with little change. Maybe a grade above the bottom at home depot on the cabinets and the basic countertops. Gotta remember this is a C apt and going to hard on trying to get great stuff will bite your budget and they may destroy your stuff and that will hurt your heart when you have to replace it all. I wouldn’t do granite unless its b and quartz in an a. C and D get particle board lol. Back splash is fine because they can’t really ruin it. Get some good cleaner and it’s as good as new as long as it’s still in style lol. But bathrooms and kitchens draw them in so make sure it’s nice just inexpensive. 

Well to be honest don’t even look at the % to market value. That’s great in theory but literally you have to look at the real numbers. Especially if you actually know exactly what the rehab is. What I do is I have my searches setup, off market is waaaaaay better but harder to find, I have a general idea of arv, I put the address into rentometer find my rent. Then I take my arv take 70% of that to get my equity that must stay in for cash out refinance (by the way I hear in April you will have to own a property for 12 months to cash out ona freddie and fannie loan) subtract that 70% number from the offer price and that’s my rehab budget. Pop my rent and my loan into a cashflow calculator and make sure my cashflow is 500 or better for safety because nothing is perfect until it’s set in leases and completed. So if I cashflow 500 or better and the rehab fits into the frame I go for it. But keep in mind holding costs closing costs etc. I burned what should’ve been a 30k profit at the end to leaving 10k in out of pocket by not counting those costs and doing more than I should’ve on the rehab. But rents and market values are not meshing well so you gotta look at a lot of deals when it’s all said and done.  They are there just don’t expect them quick unless you are getting off market deals. 

You should talk to your tax guy but I have my wy company that owns my IL purchase/rehab properties and that is a series llc and each property is individually held in a series leg when everything is completed and refinanced. For tax purposes all the LLC's pass through to me and my wife. Not saying it's correct but it's the structure I have right now. I get issues with financing sometimes but I make it work.

Any updates or results to report from minute pages?  I just came across it today. 

I’m doing rehabs on the south and west side

Quote from @Jonathan Klemm:

Hey @Darrell Essex - Not sure which groups you are looking at on meetup, but here is ours:  https://www.meetup.com/chicago...

Also, Check out the Straight Up Chicago Podcast's page for meetups.

We average at least about 30 people per event.  We do some wholesaling ourselves and have a ton of good connections in the Chicago wholesale space.  Happy to connect and talk more about how to get involved.

Awesome thanks. I looked in meetup and typed reia Chicago and real estate Chicago and go tiny ones. This is perfect.