All Forum Posts by: Mark Ainley

this is something that can be written right into the standard realtor board lease under "other provisions" and then your attorney would restate it in the attorney review period.

I am not sure exactly but iIf you send me your email or email me [REMOVED] I send you an example of one we just did. We did a lot of this the last year buying up 3 & 4 units buildings one unit at a time and then deconverting.

To deconvert is a quick draft of a document to remove it from the Illinois Condo Act for a few hundred bucks and then get it recorded. Can be done in a weeks time.

If you can buy it cash, deconvert the property to a 3 flat (1 PIN) and then go back and get a loan against it. If cash not an option a mortgage broker/banker probably cant finance this but a smaller bank should have no problem giving you a commercial loan for it. You would want to deconvert it either way because it will lower property taxes, eliminate the expense of the condo assoc, and so you can insure it properly without the double coverage.

A sharp accountant we us in NW suburbs is Pam Jacobs in Schaumburg. She is a partner in a CPA firm and also a sophisticated investor in Chicago and suburbs so she is good for people like us.

Pam Jacobs

(847) 925-1489

[email protected]

Shoot her an email or give her a call to see if she is a good fit for you. Depending on what u are looking to do more specifically I am sure I have the right attorney for you too.

Run from HOAs. Not only do they wipe out your cash flow but they control what u do and don't do and often have financial troubles themselves that only cost you the investor more of your cash flow. The trouble I have with HOAs is they are ran by a board of volunteers that lack the experience and knowledge to take on that kind of responsibility most of that time and if there is a Managment company they can get stuck following the boards lead.

I do own condos (early on purchases)and try to stay active on the board to make sure I have a controlling stake on changes and influence on the way the property is being steered.

Your in Buffalo Grove with the proximity to areas like Grayslake, lake Zurich, & round Lake where there are plenty of single family deals getting better rents for the same cost of a condo and maybe even a lower price.

60 day notice for rent increase whether it me MTM or at the end of the term so based on the original question if he was extending but raising rent then he needs 60 days.

For mailing we were advised to send "priority mail w/delivery confirmation" and this provides the tracking number needed to show proof of delivery once delivered and you don't have to worry about the tenant dodging to sign for it. We send all rtn security deposits and interest payments this way too.

For not renewing a lease in Chicago we give 30 day written notice. The big one people get in trouble for is rent increases which u need 60 day written notice.

As far as looking in the burbs I look out in the northwest suburbs and it seems as the best you can do is 8-10% return before debt service.

With management costs I am not sure what other guys charge exactly or the number of firms that will do it but we charge our handful of clients, including ourselves what I said above. I am not sure we would be able to accomplish what we accomplished without having the control of managing our own properties that is what scares me for others especially a turnkey company that has so much to benefit by getting the deal done and selling a dream.

What is the condition of the property....did the turn key operator go down to the studs, is the porch passable by code standards? I would also interview another management company on the south side. This will help you have a back up plan should your relationship with the turn key management not work out and that second management company will give you a small education on what you are up against as we are doing. We won't manage properties for 8% on the south side because it is labor intense. We do 10% of gross along with a $150.00 annual CHA fee, plus the labor & material it costs for the CHA inspection repairs. That is something people forget to take into account. Our CHA inspection costs range around a few hundred bucks on average but we have a few that cost us $800-$900 every year just because either that tenant is rougher on the property or the property has various exterior areas that need to be painted annually to pass on the chip paint rules(Lead Paint or not).

Another thing to understand is tenant portions. When a tenant has a smaller portion that means she has less income which means she doesn't work which means she is around the house all the time which means she is bored, and has people around the house a lot more with more room for management issues and unit damages. We have an easier time collecting $600 per month from the CHA tenants that work vs. the tenant with the $30.00 tenant portion.

I can go on and on....we do have 73 CHA tenants so we are very familiar so feel free to contact if you wish to discuss more. I do want CHA tenants over market tenants any day so you are on the good track there.

I am by no ways discouraging your purchase and I spend a lot of time promoting the opportunity down there to other investors and associates that wonder why we invest there. UofC is growing in ways the public has no clue and is amassing land left and right secretly, Obama's library will end up down there, and the push to connect the South Loop with Hyde Park by the city has lots of momentum not to mention it is affordable and has a lot of room to go up and still be affordable compared to the North Side. We are in this for long term hold so who knows what will happen in next 10 years but so long as it cash flows we don't care.

Truth is I spend time every day trying to expand out portfolio into the suburbs(and we do have a few in the burbs) but it is impossible to find even as close to good cash flow as we do on the south. Before any debt service we are netting roughly $7,500.00 per unit(3 bedrooms) per year with all the associated costs but not including a reserve fund.