All Forum Posts by: Henry Lazerow

I see people talking about good credit tenants and screening but real life from owning c/d rentals those applicants don’t exist. No one with good credit wants to live in a bad area, maybe your properties are really class B. It’s even hard to get the sec 8 tenants to apply sometimes as they get to pick where live and want be in the nicer areas also. 

Just start eviction and the order will say any and all occupants. You’re in Indiana it should all be pretty fast. 

Same I always push my clients towards class B/A as the results are soooo much better. Here north side Chicago we market units month or so before tenant leave and have move in/out same day makes for 0 vacancy, I have never even had to give a late fee here and don’t worry about a tenant not leaving. My working class 4 unit in suburbs would be impossible to run like that as you never know if a tenant will actually leave on time and the units always need significant turnover repairs as low class tenants destroy things, I guess it’s a cultural thing. People with 700 credit scores tend to keep things nice, we don’t even do security deposits just $550 move in fee and I have never felt burned on it. 

Whichever market have best contacts, these could be from a good realtor also but can’t be random off google or you will end up spending so much it barely even profits or goes red. Property managers won’t really care about your success unless have many many units and will nickel and dime you to fill their pockets. There is a huge variance in investor friendly labor rates vs retail often 2-3x, for stuff like a bathroom rehab retail can even be 3-4x. I even have many clients self manage from out of state, it works well as long as class A area and use good contacts. 

Great idea until they sexually assault someone in your building and then you get sued for knowingly renting to a sex offender. 

I have done 2 BRRRs its worth it but really needs to be on 4 units and maybe some 3 units so rents high enough to cover new payment, the cashflow will always be lower after a cash out refi but you should have no money in it so its an infinite return. 

The math is pretty basic. Lets say you buy a property for $600k at 20% down so $480,000 mortgage and your in it $120,000 and maybe $12,000 more from close costs so $132,000 out of pocket. Now that property has appreciated to $900k so you get a new mortgage at 70 LTV so $630,000, this brings you back out your cash so you get cash back of $150,000. Then if it appreciates you can do it again 5+ years or if do a value add big rehab can do it all a lot faster.

 Same I manage a 4 unit I only been to twice its so easy. Handyman check. Local realtor to lease it check. Occasionally an issue keys but we do backup sets everytime have someone out. The saving are completely worth it. 

OOS investing doesn't work in "cashflow" areas with crappy tenant pools. On the flip side I have sold numerous CA buyers 3-4 units in the class A northside areas of Chicago where you have 700+ credit tenants and I have never even had to give a late notice as everyone on autopay. These work very well and many even self manage with my handyman/leasing agent. They aren't cheap though around a million for the 4 units that bring in 7-8k rents a month. If you focus on growth areas with decent but not high caps it can work very well. 

Another state down :/ https://washingtonstatestandard.com/2025/03/10/rent-increase... 

Thankfully here in IL its against state law for any city to enact rent control.

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.