All Forum Posts by: Dinardo Rodriguez

@Jonathan Klemm, to answer your question my next steps from now until December 2022 is to bulk up my savings (my goal is to have 50-60k liquid to begin my search), research neighborhoods actively (I have a tentative list but sine I am originally from NY I'm still learning, research which folks  I want in my team (investor friendly loan officers, real estate agents, etc.), keep working at deal analysis so by the time I'm ready to buy I can run my numbers, and finally explore other options to investing in Chicago. I've been learning more towards buy and hold (since I am a new investor and have been afraid to dive into the world of rehabs). 

Originally posted by @Jonathan Klemm:

@Dinardo Rodriguez - You've got tons of great feedback above (@Henry Lazerow stole my thunder that Chicago landlords pay water, sewer, garbage).

I think you are definitely on the right path, doing the right things, and asking the right questions. Love the Househack strategy using FHA low down payment loan or the FHA 203k if you are up for dealing with the paperwork and rehab.

Between now and December 2022 what are the steps you have to take to be able to achieve your goal of getting your first investment property?

Happy to connect and help you along your journey.

Originally posted by @Michael K.:

@Dinardo Rodriguez

Taxes on that property were 2151 in 2020. It looks like their assessed value went up by 48% after the latest round of reassessments, so they will probably be looking at a tax bill closer to 3k in the future.

On the point about FHA loans, that PMI is going to stick with you for the lifetime of the loan unless you refi to a conventional down the line. That said, if I were picking up a property like this I would want to have a decent amount of cash on hand for whatever issues might come up.

On rents, I'm getting 1400-1500 for a 3 bed 1 bath (same small bedrooms) in Little Village, but that is all the way on the other side of Little Village, near the California Pink Line and Pete's Fresh Market. 

The last thing I want to point out is that this property went under contract in 5 days, so the market is saying that the price is right.

Many thanks!!

Originally posted by @Henry Lazerow:

Agree $1200 is high unless these are really nice large units which they aren't. 

Remember these BP calculators are built off low rent/low price properties in middle america not Chicago. Your expenses are way high. I budget $75 a unit roughly for maint/repairs/reserves and over years it averages to around that. If you are in a lower class area with more wear and tear maybe bump it to $100 a unit. It will vary but these are averages. For vacancy most of my clients average around 3% if you self manage and start marketing the unit 2 months before a tenant leaves. I have found even lower vacancy in real life but am a realtor so price things right. 

Don't forget water. In chicago landlord pays water. This depends on building but I have found $35-50 a unit pretty accurate. 

Taxes seem too high for city, maybe suburbs. I just run actual taxes for that specific property in analysis. 

Thanks for thr thoughts and interesting to see your context. There was a slight mix up in my post, this propperty was for Humboldt Park not LV (apologies). With that being said, I am also looking in LV as well though (well, not looking quite yet, but practicing how to run the numbers so I'm ready when I begin to look). 

Not too sure on the specs of the property since I'm just playing around to be able to analyze properly so can't speak much to your questions on this particular property. 

I would love to connect and see your numbers on the 4 unit property you got in LV (I've heard a lot of mix things about LV through my research/reactions I've gotten from folks). Would be curious to get your take for sure. 

Originally posted by @Michael K.:

@Dinardo Rodriguez I think with all the costs you built into your analysis it runs rather on the conservative side. CapEx is typically not a monthly expense, might be better to determine what projects need to be done after you acquire it and what they will cost.

Couple of questions, what are the unit compositions, and where in Little Village is the property located? Have the units been updated? That will help determine whether or not your rent predictions are accurate or not. I have a 4 unit in Little Village. Just sent you an invite to connect. I can show you the numbers on my property if that helps. 

Re: CapEx and Maintenance, are you suggesting that instead of allocating 5% for Cap Ex, 5% for Maintenance, and 5% for Repairs that I just budget for Cap Ex and Maintenance (each at 5%)? 

Good point on utilities and lawn care (I'm originally from NYC so still getting adjusted to having lawns in a city haha). For utilities, I was hoping tenants can pay their own utilities but feel free let me know if that is not at all common in Chicago (will add water to my calculations). 

Originally posted by @John Warren:

@Dinardo Rodriguez you are on the right track here overall, and I personally think Little Village is a great neighborhood to be investing in if you can find the right property. 

You listed maintenance and CapEx 3X, which is going to skew your numbers a bit. Most investors in the area run them at 5% for maintenance and 5% for CapEx. I also noticed you didn't factor in any utilities like water (normally owner paid), gas or electric. You also might want to budget for lawncare and snow, unless you really enjoy shoveling!

The only other number you really have to drill down into is taxes. You cannot just plug a percentage value in here in Cook County. Go to cookcountypropertyinfo.com and check the assessed value to see how far below the purchase price it is. If it is really low, do some ball park calculations to figure out how much worse it could be. You also will want to check to see if the current owner is getting any exemptions like the home owner's exemption or the senior exemption. 

Originally posted by @Frank S.:

Your purchase price seems off. At $1,200  rents, if you can even get that much in LV, you will be looking at $330k purchase price.  $250k will land you at $800s.

That listing has very small bedrooms.  You will not hit $1200.

Taxes are a tad high. 

You need to ve prepared for high CapEx, the "rehabs" in the area are really bad.

I would recommend going standard not FHA, and gave a good cash reserve otherwise you will be in trouble