All Forum Posts by: Elbert D.

I've dealt with HUD homes several times in northwest Indiana and Chicago, and they are a huge pain in the *** everything is a rush process. They very rarely go down in price. In fact, anytime someone is rushing someone's else process in a sale, usually raises red flags to me. The entire bidding process is horrible. Usually the occasion good ones that are good deals are snatched up very quickly. From my experience. The only people whom should go after HUD homes are the ones who knew about it before it was listed on the market or "home buyers" and not "investors" . Lastly, I think many of HUD homes are way overpriced. Let's see how HUD reacts when the recession or depression happens....

@Taylor Hellenbrand

Really it really depends on your finances. Which your the only one that knows about much other money you have. Sure you can make the money now. But is the area also starting to explode in development? It seems like it is. Which means It May be worth 500k eventually. No one can really give you a “good” answer for this. Either direction could be “right or wrong”

@Chris Kornbrust we are probably about the same age. But in terms of becoming a millionaire by 35-40. I guess it depends on how aggressive and how focus you are. We all have somewhere to start from. You have 100k. That’s good. Not many people have that. Especially right now. But always keep this in mind. Active income trumps passive income. 

So with that being said. I think learning and understanding construction. Should be your best bet. Not for you to throw hammers but for learning the business of construction and real estate. You can learn both at the same time. I say that to say, it comes really in handy when your looking to buy and hold real estate or fix and flip. 

i think you should build up a good rapport with a general contractor. And find areas that within the C to B range. And fix and flip in those areas. Areas that are okay or on the slow uprise. If it’s already a lot of development coming or many people wholesaling and flippers flipping in that area. Chances are your too late and need to look elsewhere due to the prices are going be too high thus reducing your profit. Then it’s not finding too many opportunities in the area due to the heavy activity. 

Always remember to rehab base on the area. Your rehabbing a house for the end customer who is more than likely a family and going use a traditional loan. FHA or bank loan. Although there have been exceptions.

Finding a good contractor is going be hard due to everyone claiming they can fix something. I’m sure you can read previous post of other people on here to see how shady many of these people who claim to be contractors are. 

Once you have your first flip done. It may be a win, it may be a loss. But the important thing is you did one. So moving forward. You need to develop systems and processes in place to scale. That’s the only way for you to be able to buy houses in areas worth investing your time in at a good price. Then let’s say you can fix and flip 5 houses then buy one or two rentals for buy and hold purposes. Or whatever your strategy is. As you learn more you will switch things up as well. 

Real estate is a slow game. It’s not perfect either. Due to many factors not being in your control. Dealing with so many people in your business operations and supply chain, but when done right. Many people will be jealous of you. Especially when you become successful. But don’t pay them any attention. Everyone wants to jump in real estate but only a few stick around. 

https://www.amazon.com/Crushing-Apartments-Commercial-Real-Estate/dp/0998381624/ref=sr_1_1_sspa?crid=2G525QBBMFPAU&dchild=1&keywords=commercial+real+estate&qid=1592797634&sprefix=commerical+re%2Cdigital-text%2C287&sr=8-1-spons&psc=1&spLa=ZW5jcnlwdGVkUXVhbGlmaWVyPUEzSklTSVlJQTlZNUhLJmVuY3J5cHRlZElkPUEwMjEzODM4MklPMUNTSTA1S1QwRCZlbmNyeXB0ZWRBZElkPUEwNDc4ODUyVTEyOFpJSUJSVTRCJndpZGdldE5hbWU9c3BfYXRmJmFjdGlvbj1jbGlja1JlZGlyZWN0JmRvTm90TG9nQ2xpY2s9dHJ1ZQ==


@Logan Bosiger

@Scott K. no sir. I don’t have any software for that. To me in my opinion. I think we have to remind ourselves that software for real estate is still new. Take for example something like Zillow. They use algorithms heavily. Just like most real estate software. Some use different formulas. But Zillow ARVs are usually all over the place. I don’t think there is any real indication of truly knowing without having boots on the ground. That only gets you so far too. No one has any clear indication how much a neighborhood value is going appreciate. It’s either going up or down. But the percentages are just estimates. Hence why everyone keeps bringing up how real estate is really a local game. Which I tend to agree with, but there are ways to being “local” without being local lol. 

With that being said, a really good realtor who isn’t desperate for a sale. Should definitely be a tool for you based on the questions you asked. 

I definitely do. 

Explain @Jake Cooper  or are you just looking for a back and forth debate? 

@Steven C.

How’s it going. I hope your flips going going well. For me and what I’ll recommend is to kind of shadow a good contractor. It’s very hard to come across good ones but they are out there and for the most part are usually always working.

Now...Not sure of which neighborhood your rehabbing in Chicago. But I hope your doing your due diligence. Very very carefully. Since your mention a gut rehab. Make sure those inspections are in good standing when it’s time for the plumbing and electrical. If you don’t know already. The city of Chicago is a pain when it comes to permits. 

Next....I hope your keeping track of the receipts the rehab crew is purchasing. Also I hope you ask for a complete break down of the cost of materials. Then double check where he got the materials from and look at the prices. Excluding his labor cost. Look and see if he bumped up the cost of materials by 5% on each item or item group. Some do that...overall time if he hasn’t try to nickel and dime you and does a good job. You will get accustom to his prices and things will start to just flow. Have him walk thru at the end of the rehab and explain what he did in every part of the house and understand why it needed to be replaced or repaired. And always keep a constant look at the budget and schedule. Rehabs especially guts. Don’t go perfect. It’s always something unexpected. Kinda plan for it. Extend your fix and flip schedule out a week or two. And pad the rehab a little for miscellaneous expenses.from that you can pretty much make up your own fix and flip expenses sheet for rehabs. Don’t forget the realtor listing fee, closing and holding costs as well. Hope your fix and flip goes well. 

Lol @Scott K. I see now. 

@Scott Passman the same can be said for MFH as well because many "investors" (newbies) also make decisions based off their emotions as well. Also there are some investors who like SFHs as rentals as well. As long as the cash on cash return is good. A intermediate to experienced investor knows. Buy rentals for the cash flow. The appreciation is icing on the cake. So many SFHs across America is also homes to tenants and not just home buyers. Hence why I was a bit confused. In theory, a SFH and MFH in a high end area should be appreciating or losing value at the same pace based on the neighborhood itself.

Well. I'll state that I haven't watched that episode. But, are these apples to apples comparisons? Such as both the SFH and MFH being in the same or equivalent neighborhood? Nearly identical Square feet? etc, etc....

@Kenneth Garrett It's very sad that this is extended. SMH. And of course like most things in Chicago involving the government. There will be an obscene amount of applications for them to process. Always backed up with something.....I'm pretty sure there will be about a six-month wait until you can proceed. Whenever they do start processing the filings. Not to mention property taxes will skyrocket next year. Its so sad the way JB and Lori are screwing up Chicago and the State of Illinois.