All Forum Posts by: Devin Londo

I live in Chicago, Illinois, and am in the process of (trying) to do a 1031 exchange, but am having a really hard time finding a new deal that makes sense. 

What I'm seeing with interest rates and taxes going up, are most places don't do more than just cover their operating expenses. Maybe I'm looking in the wrong places, but I'd welcome anyone's insight on this. 

Thanks! 

I live in Chicago, Illinois, and am in the process of (trying) to do a 1031 exchange, but am having a really hard time finding a new deal that makes sense. 

What I'm seeing with interest rates and taxes going up, are most places don't do more than just cover their operating expenses. Maybe I'm looking in the wrong places, but I'd welcome anyone's insight on this. 

Thanks! 

@Larry Turowski - Yeah, I think it's a little less than other things in the area, but it should also be free of the headaches I'd have to deal with for something with better returns, since it was completely redone only a few years back. The neighborhood is turning around, so my plan is really to just hold onto it for 5-7 years and sell it when the neighborhood is better. Still, my walk away number is quite a bit lower than they're asking, so taking your advice, I'll probably continue to keep looking. Thanks for taking the time! 

Thanks, @Larry Turowski. I do have vacancy, maintenance, and capital expenditures accounted for in my model, and I'm running in the green by about 7600 a year- still, I thought the margins may be a bit thin.  

Would you buy this place?

I'm looking at a place in Chicago in an up and coming neighborhood, it's a 2 flat with 2 1 bed 1 bath units. The building is actually a fully rehabbed coach house (5 years ago), the original main living structure was removed. Anyways, the first floor is a large studio currently getting 1450 a month and the second unit is currently owner occupied but could rent for about 1850 in the current market. The whole place was redone 5 years ago, and is in very good shape, so I shouldn't have to make any big repairs (fingers crossed) to structure, appliances, etc. Numbers are as follows:

Price: 469,000 (offered 440,000)

Taxes: 5500

Units: 2

Unit 1: 1450

Unit 2: 1850

Revenue: 39,600

Operating Expenses: 29,270

Take Home: 10,320

Cap Rate: 2.35% (seems low)

ROI: 9% (seems good)