All Forum Posts by: Henry Lazerow

Find an agent who invests themselves and who has closed a lot of investor deals. Out of state is tough though right now, run the numbers yourself with $1200 minimum as cap/ex per unit 3/4 units or $2500 per a house annually and don't believe anything the agent sends you for analysis. Most deals are at 0 or negative cashflow if your paying a manager and properly accounting for cap/ex. I have had some clients out of state self manage larger class B 4 units $800k range and it seems only way to cashflow right now is self managing larger deals. 

House hacking is the best way as allows you to get in with a low down payment. I started with a house hack and re-used that equity later on to get to 10 rental units. The hardest thing in 2024 is finding cashflow though, most of the nice areas have very low COC if you can even find positive but its always better to start then never get your foot in the door

I have window units in my 4 unit that is in a upper middle class part of Chicago. It is fine and has near 0 vacancy and lots of happy tenants paying good rents. You won't get the very top of market rate rents but will get the market average or a bit above. For very high end units I would add it but for the rest its fine without. 

Making the basement a legal unit is costly but can be done as an ADU depending on your exact location (ADU zone maps are on City of Chicago site). Expect to spend a minimum of $100k+. If you are on the northside by making it an illegal basement you will increase the value of building and I have never seen any clients have issues. You can do it without permits for less then 1/3 the cost and buyers will still pay a significant premium for a building with an illegal basement. I have even seen twice city inspectors walk buildings for other issues that have illegal basement units and as long as unit looks like a legal unit (normal ceiling height and two egresses) they didn't even say anything.

For the lenders in here just curious is the rate on a DSCR higher if vacant use market rent? Or do you mean rate is higher due to 80 ltv vs 70 ltv? Thank you

What are you typically seeing on 70 ltv 0 points 3/2/1 now? 

Multiple new accounts with almost 0 posts are saying they are good....RUN 

Are you sure the lawsuits even have any ground? A lot of these pro tenant non-profits just mail out hundreds of these to see if can get payouts. "In the state of New York, anti-discrimination laws cover most types of housing, with four main exceptions:one- or two-family owner-occupied buildings. room rentals in housing for individuals of the same sex, such as college dormitories or boarding houses where all residents are of the same sex."

People in C and D class will tell the tenants to use their insurance and kick rocks. In my A or B area rentals we would definitely waive rent for those days and keep a good relationship. Why I have never had anyone not pay me and typically have tenants stay few years and OK annual rent increases. 

Be VERY careful of the cheap midwest houses. I have toured many and they tend to be janky and your few hundred in cashflow will get eaten by cap/ex. 

Here in Chicago we have class A/B areas that hit .8% rent to purchase with rents that go up each year and multiple applicants per a vacancy. Many think of midwest as cashflow but there are gentrifying areas that see rapid appreciation such as Albany Park, Rogers Park, Avondale, Pilsen, etc. I personally own a 4 unit Rogers Park and seen rents go from $1200 to $1600 over last few years.