All Forum Posts by: Henry Lazerow

These basement units are very common in Chicago. I have sold many 2-4s with them. My clients typically give a credit to the first floor tenant for the electricity that the garden unit uses. You can also add a meter saying to city the meter is just for a basement and that works too. Airbnb can be a great option. The basement units rent really fast as so much demand for “cheap” housing in nice neighborhoods. Even really crappy basement apartments get a bunch of applicants. For insurance you just tell them how many total units in building, as long as no injunction/violations saying units not legal it’s ok for the insurance companies I have talked to at least. 

THE MOST IMPORTANT THING! Only rent these to great tenants 680+ credit and 2 good references. If there is a problem tenant they will call the city and the city may make you remove the unit. Outside the north side if in an area with lower quality tenants I would just run it only Airbnb safer that way. On north side I have seen them be used for 30+ years no issues. 

Even all the red states are voting against state crypto funds. 0 chance congress passes that 🗑️

I am in similar position also with a 4 unit low rate and ton of equity. I ended up getting a HELOC but the heloc is at 9% and variable with a 22 yr max term left so it's not good for anything outside temporary draws. I used the heloc for a flip though and that worked out well! I still plan to in a few years do a 30 yr fixed cash out refi when rates hit low 5s giving up my rate and use that money for down payment on a LTR or maybe a new build for Airbnb idea I had.

Congrats and I would recommend join a team or find a popular brokerage where can host other agents open houses to meet clients. You can leave or negotiate splits once have experience. 

I am with @Brie Schmidt on this. My 4 unit in Roger’s Park I have not even had to give a single late payment notice for the 7 years I have owned it and my vacancy rate has ran under 3% on average. I have sold 97 Chicago buildings and can only think of 1 time a client had to evict and it was because they did no due diligence on an applicant and trusted a fake printout. On the north side there is multiple 680+ credit 3x rent applicants with great landlord references every time you list, sometimes our rentals even go over ask as people fight for them lol north side is in very strong demand. The evictions tend to be in certain areas and are absolutely NOT a common thing city wide.

I often get California investor clients wanting to buy in some of the terrible areas, they get mad when I’m honest and point them to pricier areas where you actually collect the rent. Some parts of south side run at 10% eviction rates. With 6-8 month eviction and turnover costs even if buildings almost free you won’t make money on those. 

“Once fifty percent of tenants waive their right to purchase, the time of tenant rights ends”

Being 50% of tenants voting no to buying ends the opportunity for tenants to offer, sellers could probably just get the occupancy down to 50% and set up an LLC to rent the other 50% of units, may not even need to empty whole building saving on the carry costs. Is there a restriction on owner interest in a corporation for tenant voting rights? The original 30-60 day notice period is really not a huge deal as long as know can sell after that period ends without issues. We already plan out most of our listings a good month or two in advance anyways.

What are the work arounds Washington DC investors/realtors are using? I assume just emptying a building of tenants prior to sale is probably going to be easiest. 

Congrats on the first $10k saved! I have lots of first time buyer investor clients and always recommend a house hack (buy a 2-4 unit and live in 1 unit) but you need at least $40-50k I'd say to safely start even low down as need repair reserves, etc. Condo can also be a good option if only have $10k just make sure it does not have a rental cap, I have sold a few condos to investors who move out after 12 months, rent it out and then buy another. They can get you started with little risk/capital. I find condos with no elevator tend to have lowest HOA and cash flow best.

I self manage a 4 unit that’s 2 hours away I have only been there twice. I also have several California clients who self manage north side Chicago rentals. As long as the area is good it’s easy. Just need handyman and a leasing agent. 

Investing in a friends syndication or flip is one thing, but I always thought these “public” syndications were extremely risky as they don’t care about you and can easily turn into permanent loss of capital. They get their fees either way. I still see ads for Ashcroft online, it’s crazy they still are getting new clients while doing multiple capital calls.