All Forum Posts by: Garfield M.

Most often, this is not covered. 

If you had a big outfit 24 hour type commercial plumbing company giving you the diagnosis, I'd get another opinion. Many times they will try to show you a camera of what they see then they'll want to run your credit for a $15k quote. I've known some people who almost fell for this. As stated previously, this issue might be solved by simply accessing a clean out with a rodder to the city sewer line. You could also get it hydrojetted as long as the integrity of the pipe is good although will be more expensive but a lot less than digging the floor up. 

The garden unit was in poor cosmetic shape - old carpet, bathroom outdated but mechanicals were good - all copper and PVC, a panel in each unit. 200 amp service from alley. I got the bathtub/tiles reglazed by my friend for $500 and bought a new vanity for $200. $1800 for countertops. (I spent $1660 for the flooring including delivery since I don't have a truck). Kitchen cabinets professionally painted - that was $1600. I also spent some money to paint the entire unit. All in all I spent about $5k on the garden unit most of which was on the kitchen.

As far as layouts, the top floor is a 2 bed 1 bath, middle is 3 bed 1 bath, garden is 3 bed 1 bath. The lot is 31 ft wide so the units are larger than typical 3 flat - about 1200 sq ft each unit. 

I have experience with Airbnb and the returns used to be great, but I haven't had one since 2019. I have not used the platform for over three years. It can be a lot of work and I just didn't have time. Since then, Chicago BACP changed rules but there's still room to operate Airbnb but it has become much more difficult (at least legally).

I'd start by your researching the law here:

https://www.chicago.gov/city/e...

I think you'll see a lot of STR investors move toward >30 day midterm rentals in the coming months and years as the strictly STR route is not feasible in many markets. Airbnb as a company is beginning to adapt to the changing reality in the housing market that the fastest growing trend in the rental market is the growth in the midterm rental arena. At a high level, 28% of Airbnb's income is now from midterm rentals (30 days or greater). This calendar year especially, they are beginning to market and encourage hosts to allow stays of 30 days or longer. They probably had data in the past from digital nomads renting these units for longer stays but the uptick in the past 2 years from the WFH and travelling healthcare professional perspective has likely changed their tune. This article describes the trend (nationally):

https://www.cnbc.com/2022/02/1...

The problem for you is that these national trends don't matter in the city of Chicago.  If you're signed up on Airbnb or VRBO, etc. you're considered pretty much a hotel in the eyes of the law and condo associations. To be fair, that can be accurate in many situations. So as Airbnb evolves, will the city of Chicago also recognize these changes? - - - not likely. It's not high on the list of things for city council to get done. 

I'd definitely try Airbnb but if you want to have a more sustainable model, your other option is to look into corporate housing/midterm rental market. It sounds complicated but is pretty simple and probably easier to operate than a typical Airbnb, when you do the research, all things considered. If I was you, I'd look into Furnished Finder as a platform host and see if you can make it work that way as a backup should Airbnb not be possible for you. I am of the opinion that this is a better model, especially if you're a hands on person as the management is minimal. Just my opinion and experience operating both as an owner.  If you have a nice place, you may be approached by a staffing agency directly who will provide you with a steady stream of tenants. This is more likely in the best neighborhoods with the best finishes. There are also facebook groups you could look into. You can connect with healthcare recruiters also. Many options, strategies, and approaches to consider, some more work than others but I wouldn't limit myself to strictly Airbnb if I was you. You just have to be good at finding the tenant pool. 

Before you buy a property I'd also consider that you should be sure you also cash flow if you operated it as a normal 12 month rental. This mitigates the risk. I don't think it's likely that the midterm rental market disappears or Chicago lawmakers find a way to outlaw it but this helps to ensure you don't operate at a deficit. 

I'm late to this post but I like the intellectual exercise.

West Elsdon has been a solidly middle class area it's entire existence. The neighborhood never had a "bottom" like Wicker Park or Uptown in the late 80s/early 90s. The economic shape of West Elsdon could be better but it's solidly middle class as far as Chicago neighborhoods go. The values never really dropped that low. The properties are typically pretty well kept.

Polish/Lithuanian population has mostly made way for Hispanic population. The latest census shows this and an ever so slight increase in Asian population as the Asian population has begun expanding southwest along Archer and the surrounding neighborhoods. This can be seen if you are in the neighborhood or take the 62 bus. 

It will likely remain a middle class neighborhood for the next 20 years on par with an average rate of appreciation.

Hello, I am a new member here but a long time reader of the forum here and listener of BIggerPockets podcast. I've learned and taken advantage of many of the things I have learned on this website. 

I am 31 years old, born and raised on the Southwest side and started with my first purchase of real estate in North Kenwood/Bronzeville area in 2014, a 3 bed 2 bath condo. I have since sold this condo in 2019 when i decided to move in with my fiance at her condo in west Logan Square. 

In 2021 my wife and I bought a 2 flat with nonconforming basement in McKinley Park. In 2022 my wife and i bought another 3 flat in McKinley Park. I self manage.

I am contributing here to share my experience and help others. I have good knowledge of Chicago neighborhoods, especially on the Southside. I enjoy following demographic trends and determining what they mean for the future of neighborhoods. I am an avid cyclist and consider this the best way to examine neighborhoods as you can make better observations than in the car and cover more ground than on foot. I have covered alot of ground over the years and and am very familiar with various pockets ofthe city. I do not work in real estate, I am just here to learn and share. In the future, I plan to learn more about 5+ unit properties and see if it is right for me.

As a property investor I would consider myself a buy and hold investor. If I am going to buy something I ask myself what it would look like on a 5-20 year time frame. Any less time wouldn't make financial sense and anything more is too hard to reasonably predict. I am interested in buying in neighborhoods that have a better than average potential rate of appreciation. I am only interested in investing in the city of Chicago. 

If you think I can be of value to you, please reach out and I can share my perspective and opinion.

Disclaimer: this is not my real name, I am preventing any potential conflict of interest with my employer.

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $550,000

2 flat in McKinley Park with nonconforming basement. Turn key. Coin laundry in basement.

What made you interested in investing in this type of deal?

Great location, upside appreciation potential.

How did you find this deal and how did you negotiate it?

MLS, offered asking price first weekend of showings after seeing the numbers worked for me.

How did you finance this deal?

5% down conventional no PMI

Down payment and closing cost - about $38k after seller credit

What was the outcome?

Good cash flow when move out $1000 a month

Lessons learned? Challenges?

Didn't realize electric panels had breakers installed to boxes with no rhyme or reason making it difficult to have tenants pay electric bill. Ended up renting the units to travel nurses so utilities were included, this allowed me to live for free. There is an initial investment, the expense to furnish the units should be conbut if you plan correctly and watch FB marketplace during moving season you'll find some great deals on furnishings. Buy the things in advance so turnover is easy and quick.

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $565,000

3 Flat McKinley Park. Gut rehabbed 2011, minimal rehab in 1 unit - $5k to add new vinyl flooring, new bath vanity, quartz countertops, paint entire unit, professionally painted cabinets. Saved money by doing the work myself. All units with in unit laundry, stainless appliances. Monthly cash flow is based on after move out. Financed 10% down conventional, no PMI. Brought about 66k to closing (seller credit). Bought prior to hitting MLS by calling selling agent.

What made you interested in investing in this type of deal?

Strong rental market, good location. Stable rental community. I already live and manage in the neighborhood so its been easy to manage.

How did you find this deal and how did you negotiate it?

I found this property by walking my neighborhood and I saw a "coming soon" sign on the property. I reached out to the seller agent and my agent prior to the property hitting the MLS. I made a strong offer after seeing the potential. First floor unit needed some work but nothing major, easy cosmetic fixes that made the rehab cheap and easy. I offered the seller free rent in his unit for one month to close on his new house.

How did you finance this deal?

10% down conventional no PMI

How did you add value to the deal?

Seeing the needs of the seller and making an attractive offer that worked for both sides.

What was the outcome?

Top floor rented for $1700 with one weekend of showings.

Bottom floor rented for $1600 in the same weekend. These rents are higher than I was expecting so monthly income is higher than planned.

All rehab work was completed and vacant unit was rented within 30 days of purchase.

Lessons learned? Challenges?

Get professional pictures for your rental postings, especially if you have nicer finishes. Although Purchase price was high, I anticipate this property to be easy to manage due to the recent gut in 2011. The numbers worked for me since the cash flow is there even at a high Purchase price.