All Forum Posts by: Henry Lazerow

I almost always recomend my clients to install in unit laundry. Atleast here in Chicago it bumps up your rents $100-200+ a month so pays itself off very quickly. I have it in all my units. 

Shoot me a PM. Most mls listings have under market rents in that area too but would need run comps in exact area, it will likely be a bit lower then west of highway Avondale map area. In unit laundry is always worth doing, will pay itself off in a year or two from being able to get higher rents.
 

Don't invest in low class areas and you won't have to deal with that kind of stuff. 

Here on the northside of chicago you can get 4 units with class A tenants that cashflow. They cost $800k+ though but well worth it when want investment that actually performs profitably. A lot of the flyover states have cheap houses/2-4s but junky tenants and lots of cap/ex. 

As mentioned above your new rate should actually be 6-7 range not 8s so shop around. Look at doing a cash out refi or just sell it for some higher cap rate properties. Not a bad problem to have! 

Victor is right they are becoming significantly more strict at approving these. The plus side is the airbnb supply has fallen and we have noticed a HUGE increase in our gross STR rents, roughly 20% higher then a year ago. It's a little harder to get them approved but still very doable. You need make sure your ID also says the unit number, the city will not approve you if it only says the building. There also are options for 5+ unit buildings where do not need to occupy and can even have more then one airbnb in city if own those.

Having a hard time finding cashflow? A helpful trick is to completely ignore the rents the buildng comes with and figure out the actual market rents you can get. These numbers will often surprise you with a significant jump 50%+. This is a strategy I use for myself and all my clients. For example Avondale typically has 2-4 units for sale with 2/1s at $1200-1600. What you actually can get is $1800-1900 for 1/1s and $2300 on 2/1s. I usually recommend clients a pretty easy cosmetic rehab which is refinish floors, replace cabinets with modern white ones, add a white stone, new appliances, new bathroom vanity/mirror/light fixture and add in unit laundry. See below screenshots/map area.

I did a similar strategy when bought a 4 unit in Rogers Park to help myself create high cashflow. This strategy works best in the areas seeing the strongest gentrification. Some of my favorites are Portage Park, Avondale, Logan Square, Humboldt Park, Albany Park, Irving Park, the south parts of Rogers Park that boarder Edgewater/Andersonville which are getting high income renter pushover. Brighton Park, Pilsen and Bronzeville on the south side. 

Another trick is know how to run vacancy rate by area. Many of the BP calculators want you to put in 5% but this is not always accurate. On the North Side we run real life at 1-2% vacancy and run our analysis at 3%. We have tenants move in on the same day a tenant leaves by marketing the unit 45 days before lease ends.

I have done tax defer settlement setups for sellers before. Nothing illegal about it. Now if they paid off a lien holder before close with your earnest that would be illegal, a bit hard to understand the full story from your text. 

Sue the seller, any payment delinquencies should have been disclosed. Especially if seller just received a windfall from the sale it is definitely worth suing for damages. Can name their brokerage in there also to go after insurance. 

I have brokered a lot of deals to out of state buyers. The ones who bought 3/4 units in good area $500k+ buildings did great, these ran with no issues, rents increased/appreciated. The ones who bought cheaper properties trying to fix up had mixed results with one getting hustled by a contractor and definitely going into the red. Buy good areas and buildings in decent shape. Dont chase yield and don’t try brrs until have owned a few with tested contacts for labor.