All Forum Posts by: Joey Nakayama

I highly recommend the meetup that @Brie Schmidt organizes. 3rd Tuesday of every month on the NW side of Chicago.

https://www.biggerpockets.com/forums/521/topics/340460-chicago-meetup

@Steven Muresan I've never heard of charging tenants a fee when renewing or extending a lease. Even if you went that route, I wouldn't call it a "move in fee" since they already live there. 

Move in fees are less about mitigating risk (which is what security deposits are for) and more about covering the almost guaranteed costs of refreshing an apartment between tenants, e.g. paint touch ups, cleaning, etc. 

If you want to account for those extra expenses and are open to a yearly lease, another option would be to spread the fee you planned to charge over the course of the year as a rent increase. A $25/month bump will probably feel much less objectionable to a tenant than a $300 renewal fee they've never had to pay before, and the same amount of money will end up in your pocket at the end of the year.

I've lived in Chicago almost my entire life. It's a city of extremes. There are areas that are booming like I've never seen before, and there are areas with entire blocks of vacant lots and abandoned buildings. The same stark differences exist between neighborhoods in terms of crime rates, income levels, etc.

Because of this, I find many of the "40,000 view" stats about Chicago -where the all of the extremes are averaged together and presented as simple data- almost meaningless. Even neighborhood-specific data can be misleading if you don't understand the dynamics. For instance, some gentrifying areas actually see population loss as multifamily buildings are converted into SFHs and apartments that used to house entire families are rehabbed and rented to a couple roommates. 

You just have to know the neighborhoods. 

$1730 for 1500 sq ft 3/1 apartment + garage space - Irving Park (NW side of Chicago)

Depends on where exactly in Chicago you're looking. There are many, many sub-markets here, with shockingly stark differences between them. 

Looking at statistics for Chicago as a whole is almost meaningless. There are areas that are booming, with lots of new construction and rapidly increasing property values. There are areas that have been in decline for decades with more vacant lots than buildings. 

I find the Trulia crime map misleading. Even reading the notes won't give you the full picture if you're not already familiar with the area.

Busy and heavily populated areas often show up as bright orange, even if they're generally very safe. More people and more businesses = more chances for incidents. In Chicago, most of the Loop, River North and Old Town look like a criminal's playground on Trulia, even though they're some of the most expensive and safe areas in the city. The same goes for parts of Wicker Park and Lakeview. 

One thing you can generally count on, though: if you see a lot of crime in a solidly residential area away from a major intersection, it's probably not great. 

Heat maps are an awesome way to quickly visualize data, but only if that visualization is done meaningfully. It's not very meaningful when credit card fraud and shootings are treated the same. I would love it if there was a way to filter Tulia's map by different types of crime. Spotcrime.com does a better job of this this with their icons, but they don't heat map their data. 

Trulia, if you're reading this...add some filters and you'll have a lot of grateful RE investors!

You may want to build management into your projections even though you're self-managing now. Managing 32 properties yourself will likely feel much more like a job than an early retirement...

At that scale, you'll have a lot more business to offer a management company. That leverage should help you get both better terms and better service. 

SmartMove will make a recommendation based on the information it finds. I would imagine that it would find the DUI and factor that into the results, but I'm not positive.

However, you will get to see all of the info that led to the recommendation and make a decision on your own. The app is not the ultimate judge — you are. A few years ago I approved a couple who were "rejected" by SmartMove because they were recent immigrants, and the app had difficulty verifying their identities. With a bit more documentation I approved them, and they've been amazing tenants ever since.

So it's up to you. Make sure your criteria for acceptance are within fair housing laws and documented somewhere. And whatever you do, screen him even if you think the app might "reject" him. For all you know, he may have terrible credit or a long criminal history and is hoping the DUI story will get him out of screening altogether. Unlikely, but you never know!

Sounds like a handyman job. An Angie's List search will give you some good leads. I think @Brie Schmidt has used Handyman Matters and was pleased with the results. I haven't used them yet, but I'm having them estimate some work right now.

Yikes. Just the notion that "major repairs" can somehow be considered a single category with an approximate price tag makes me scared for everyone who attended that seminar. 

I've walked away from two multifamily deals in the last two years because of "major repairs". Roof & parapet replacement and rear enclosure reconstruction in one, major foundation issues in the other. Had I used your Rule of 5, I would have bought both of them and had multiple tens of thousands in unexpected expenses. 

Rules of thumb are are only useful as far as they can steer you in generally the right direction. Using this one would have steered me towards financial disasters disguised as decent investments.