All Forum Posts by: Gerald Joyce

They will take the floor out down to the footing, rework all the drains in the building, install drain tile on the inside of the foundation that drains to a sump. Overhead sewer and ejector pit also. 

I am not interested in the equity of the building so much as we plan to hold it for a very long time. In terms of ROI, I was really thinking about rent vs. cost calculation and if it's worth it. What is the general calculation/guidelines on should I do X upgrade to get Y rent (taking into account an increase in property taxes)? Also, any very ballparks idea of how much property taxes might go up for something like this?

My wife and I just got done rehabbing a brick two flat in Ravenswood Gardens. All new electric, plumbing, HVAC, etc. We didn't touch the basement. The basement has a 7'6" ceiling and dedicated doors for both ingress and egress. The GC said it's a good candidate for an ADU and that she can put a 3 bedroom, 1 bath unit in there for $120k the has flood control, dedicated utilities, etc. I would estimate that we would have to carry the construction loan for 6 months before we could rent it for $1600 - $1800 a month. What is the formula that you guys would use to calculate ROI and whether the investment was worth it? Any ballpark idea what percentage our property taxes would go up if we went from 2 to 3 units and how does that get plugged into the calculation? Anything else that should be added and calculated in? We have worked with this GC in the past and she is generally very good at giving a number and sticking to it. My wife and I currently live in one of the existing apartments. If we moved out and didn't do the ADU, the building would cash flow about $500 a month (more, if rates come down and we refinance). If we stay, our tenant pays more than half of our mortgage and we live in a much nicer apartment than we could probably rent. I would like to know if the investment in an ADU makes sense. I spoke to a builder friend in the neighborhood who has done a ton of two flat conversions and McMansions in the St. Bens/Roscoe Village/Lincoln Square area and after 5 seconds of thinking, he thought it was a good idea. That's off the top of his head though. I was wondering what you guys thought.

Thanks Mario. About how long ago did you have this done? Also, what part of the city was it? The reason I am asking what part is that a lot of contractors charge higher/lower prices for the same work in different neighborhoods. 

f you had exposed ductwork, did that mean that there was already HVAC in the building and you just replaced it with new stuff? I need to remove the old steam, install all new ductwork, and two new furnaces/AC units. It's pretty much HVAC from scratch. I intend to repurpose a pantry in each apartment and put the furnaces and water heaters in there.

I would like to know your thoughts on the upside/downside/estimated cost of converting a brick two flat (one bath, three bedrooms each) in Ravenswood Gardens (60625) from steam heat to forced air with AC. The Units have a small pantry/storage room that could house the furnace. A/C would most likely go up on the roof. The Units are about 1200sq ft. each.

The building is plaster and lath construction, so I would definitely be looking at having to repair some if it when done where we had to run ductwork from the main feed into the individual rooms. I was thinking of exposed, circular ductwork attached to the ceilings to save money on soffits and give the work more of a loft feel. I am guessing I would have to add some circuits in the electrical panels. The units will have 9 ft. ceilings.

Or.....would it be cheaper to put the furnaces in the basement and run ductwork up through the walls (I can't see how that wouldn't be more difficult/expensive)?

I replaced separate basement located furnace/HVAC/water heaters units with in unit furnace/HVAC/water heaters in a two flat about ten years ago, but have no idea what it would cost in 2023.

Has anyone done this recently? If so, what was your experience? I am particularly interested in the price (I am really, really interested in the price).

Thanks. 

Hi, @Lumi Ispas can you send me the contractor's info as well? I have a three flat in the Logan/Humboldt area that I will be doing a 203k rehab on. Thanks.

Thanks so much to everyone for this post. My wife and I own a two flat in North Center, rent out the upstairs and have been wondering about how we could buy another investment property (hopefully in the city) and what type of investment property that might be. I am in the education phase at present and still trying to figure out how to finance a deal. I've listened to some of the podcasts and have completely been convinced that the numbers on any deal have to make sense. I will be checking the Chicago related posts on a regular basis.

Thanks Brian. For someone just starting out, that was an explanation I could really get my head around. It helped a lot.

Thank you Brie and Joe. I am very new to this, but it would appear that my only hope of using the HELOC and getting my money back is find undervalued properties or do improvements? I live in Chicago and was looking to buy something in the city. I'm not really sure that I can find something that undervalued or a place that would increase dramatically in value with some minor improvements. However, I am new to this and may be wrong. Do I seem to have that right? If so, do you have any other suggestions with regard to a down payment? We live in a two flat in the city that I rehabbed myself and have a tenant upstairs. We like renting and see this as something that we could potentially do on other properties. Mostly, we were thinking about small condominiums and two flats as long as they are cash flow positive after setting money aside for maintenance, etc.

My wife and I are looking to buy some rental property. We have a home equity line of credit that we could use for a down payment. Our idea was that after the purchase we could refinance and take our HELOC money out to pay it back to our HELOC lender. However, I'm not so sure that I can do that easily without a bunch of caveats and gotchas. For instance, if we bought a property for $160k and put down $32k, could we refinance the rental property at a later date for the entire $160k, so that we could get our HELOC money back and repay the HELOC lender? We have never done this before and if someone could please give us an overview I would be very thankful.