All Forum Posts by: Eric Sanders

If you are getting 8.2% while house hacking, that's unreal. 

If 8.2% is while you're not living there, i'd let you know that the average annual rate of return for the S&P is 9.8%. 

Real estate  can be a lot more consistent and there's room for greater returns depending on what you do to the property, and factoring in appreciation.

Considering the time spent landlording/maintaining the property, you have to ask yourself if that time is spent well given the 8.2% CoC return, equity gained, and possible appreciation, compared to the 9.8% return on the S&P.

Hi Everyone!

I've got a little bit of a flooring predicament and I'd love to get some advice from you guys! Please bear with me as your help will be greatly appreciated!

I currently rent out a condo within a poorly built building which has crummy frame construction in between floors. Lukily, the ROI on this thing is pretty good but renting this unit comes with its fair share of headaches.

My tenants (who are leaving at the end of the month) have been great with me throughout their residency, but the unit owner below me (who happens to be the HOA president) has called me every month this past year, complaining loud foot step noises in the middle of the night in and near the bedrooms, most likely from jumping out of bed. There have also been some comments about how noisy it is all around the condo, as the eating area and living spaces all have laminate flooring (with bad padding), but the noises from daily living operations are bearable (although noisy) for the unit owner below.

Admittedly, the carpet and padding in the bedrooms seem to be pretty thin, but just outside the bedroom there is a laminate floored hallway to the bathroom, which seems to be excessively noisy, especially when being traveled in the middle of the night. 

FYI, my lease does require tenants to cover 50% of the laminate flooring with area rugs and padding beneath, but it hasn't seemed to help much. Honestly, even from my perspective, I'm amazed the HOA allows laminate flooring to begin with.

I've looked into ways of soundproofing, or significantly mitigating noise transmission from my condo, and from what I've heard, even the most dense, best impact absorbing underlayment for laminate flooring won't do much in a poorly built building. Removing subfloor and installing isolation clips / strengthening the construction between floors isn't really an option as the building isn't mine. 

People are suggesting that installing carpet everywhere is the best option to prevent future noise complaints, and I'm open to the idea, but I think there's a few ways I could skin this cat, and I would love to hear your opinions. Please keep cost in mind when suggesting an option. Feel free to reference the attached (and crude) drawing in this post.

Option 1: Replace all carpet and padding in bedrooms, remove laminate from just outside Bathroom #2 (not numbered) and install carpet and padding just outside bathroom as well. 

Option 2: Remove all laminate, replace with carpet and padding. This option seems odd though as I can't imagine people would like carpet in their eating area.

Option 3: Remove all laminate, install tile in eating area and try to make it look like rest of tile in kitchen. Living room will then be new carpet.

If you have any other suggestions, I'd love to hear them!

Thank you!

-Eric

Hey Mark,

I don't know much about working within Evergreen Park, but I do know the town requires a $10,000 bond that they hold onto for a year before giving it back to you, for every investment property you purchase. 

Best of luck,

Eric

Calculating the interest and giving the tenant the correct amount is a concern of mine. I'm just trying to understand if using one account for all the deposits is allowed or not. 

Definitelt appreciate all the posts on using move in fees as opposed to deposits though. Less room for error on the landlords end.

Hi Everyone,

Quick question on security deposits in Chicago. 

Can I combine the security deposits of different units into 1 bank account?

I understand that landlords cannot commingle security deposit funds with the assets of the landlord, and the security deposit must be kept in an FDIC insured bank account located in Illinois, but it's not clear to me if multiple security deposits can be combined into one account. Just trying to err on the side of safety

Thanks in advance,

Eric

Hi @Mehgan Moore, I recently purchased a condo in January, and since then there has been ups and downs. 

Cashflow and ROI is better than anything else I've seen since looking for almost 10 months now (I think I'm at 18% CoC not including equity) and I haven't had to worry once about maintaining the property or anything like that.

The downside is the HOA president has complained about tenants being too noisy, and I've had to field a number of calls from her in the past. Too many noise complaints and I can get the HOA board to fine me as they see fit. I'd highly advise looking into condos that are built well with flexicore / concrete with decent soundproofing.

If you're worried about the HOA costs increasing, I'd also advise asking for a 5 year forecast on anticipated expenses and improvements. Sometimes they may not be able to give you that info but some good associations can give you an idea as to what's coming for the next few years.

Hope this helps

-Eric

I'm also keeping an eye on some of the western neighborhoods / Bridgeport, and I'm hoping we are in somewhat of a bubble seeing that there are so many renovated buildings for sale with rents that don't even cover the mortgage, let alone other expenses. Mind you, I haven't done any marketing but the MLS consistently shows overpriced units with buyers who seem to only bet on appreciation.

Definitely opportunity in Humboldt park, and, but it seems like the rental demand isn't nearly as good as it is in Ukrainian village. 

@Brad Mirkovich thank you for the welcome. I couldn't agree more, finding those properties in a very safe neighborhood around this time of year can be tough. Might have to continue to drive a bit more to see what other areas seem to be doing better than others, and let's hope the market starts to sway our way sooner than later! 

Best of luck on your search for that 3 bedroom unit in a multi-family, I can't imagine those are easy to find deals on.

Hey Everyone,

I've just embarked on my real estate journey and am set on buying and holding rental properties in the southwest Chicagoland area, being anywhere from Beverly, Chicago to Orland Park. I wanted to ask if anyone is familiar investing in this area, and if they can share their experiences or share any suggestions they might have. 

I'm somewhat familiar with this realm, which makes me feel more comfortable investing around here, but I would be willing to look elsewhere that allows me to commute to Tinley, and would make my fiance feel safe. Ideally, I'd like to house-hack a small multi-family property, but the inventory for these smaller multi-families does not seem that great. 

Also, if there are any realtors out there, familiar with these areas, and are comfortable working with investors, feel free to reach out!

Thanks in advance!

-Eric

@Dmitriy Fomichenko, thank you for the recommended links, I'll be sure to check those out.

I will be happy to let you know of anything on the south side @Jason Xue!