All Forum Posts by: Jake Fugman

@Randy Gillon Thanks for the recommend!  Can you private message me his contact info?

Hey everyone, 

Hoping to get a few good recommendations for GC crews in the SW suburbs - specifically anyone that services Countryside, La Grange, Brookfield area.   

Also, any investors or agents in the area that want to look over my underwriting, network, or connect on future value add project feel free to reach out.  

Cheers!

@Ceasar Rosas  Im personally looking at similar size deals (4-8 unit) in "fringe" neighborhoods, and also represent several buyers looking for slightly smaller properties (2-4 unit).  

I like the near west side and NW side (Logan, Humboldt, Avondale, Iriving Park, and Jefferson Park) for a good balance of appreciation and cash flow.  If you want a higher than 8-10% cap rate you need to be on the south side OR in some of the C+ class suburbs that have an inventory of 4-10 unit apartment buildings (Berwyn, Countryside, Addison, Melrose Park)

Lets connect if you have time when you are in town. 

@Nanda Netto does that 90/10 come with a commission cap yearly?  Careful here because a 90/10 split will actually net you LESS than an 80/20 split (with cap) after you git a sales mark of $3.2M or so.  

@Nanda Netto Im an investor who got my license this year as well. I chose my brokerage based on a combination of flexibility, tools, and passive income potential. I would make sure the firm you go to has low monthly fees, and also has an aggressive commission split WITH CAP. Mine for example is 80/20 then I keep 100% after a $16,000 cap. Since I was also going to be doing my own deals I made sure they allowed for X amount of free personal transactions.

Good luck!

@Account Closed -  Geoff makes good points and I agree that if you should save up the cash VS paying extra on current mortgage.  If/when you plan to buy your second property you will likely rent this one out - then you are able to add 75 - 100% of the rental income to your personal income. 

THUS, as long as you maintain a decent income/debt ratio, and keep your income properties at a break even level or better (after debt service) you can borrow on up to 10 investment properties on your personal credit before you need to get creative with financing.  Keep in mind you will need to put 25% down typically. 

Hope this helps!

@Harjeet Bhatti wont they become his funds if/when I lend them to him before closing?  

Hey all, 

I'm considering lending cash to a flipper friend of mine so he can make a cash purchase on a $200,000 deal which is requiring certified funds.  His plan will is to obtain delayed financing ASAP after purchase so he can pay me back in full w/in 1-2 months.  Assuming he plans to flip the property after a 6 month rehab I anticipate he will make approx $50,000 - 75,000+ after selling/closing fees.  

Has anyone ever offered taking equity/percentage of the final profits VS interest or points?  In this case if I would likely ask for 10-20% of net profits when property is re-sold in 6-12 months.  Too much? Too little?

Any ideas or examples are appreciated!

@Craig Garrow  Typically the value in a brokerage is the people/relationships.   As a result the EBITA (earnings before interest taxes amortization) multiplier for selling/valuing a brokerage shop is VERY low (compared to a buying a manufacturing company for example).  I would ask your self how much of that revenue would truly stay when he were gone... I guarantee its less than you think. 

Is there a reason why you wouldn't "inherit" most of the clients if you simply hung your license somewhere else when he retired, but got his blessing to market yourself as offering a similar service?  I doubt he will even try to sell his business if its small. 

@Derek A. Depends on budget and your threshold for the balance of cashflow VS appreciation. The southside (South Shore, Hyde Park, Woodlawn, Washington Park) is still the best market for higher cap rates (cash flow). The highest appreciation of 2-4 unit buildings in the last few years has been Lincoln Park, Roscoe, Lakeview, and Wicker Park area from what I have seen, but you get almost zero cash flow and will need to count on appreciation over at least 5-10 yrs to hit your ROI goal(s).

When Im working with clients looking to buy a in an area that has good balance I typically direct them to areas on the near west and NW side.  I like Humboldt Park, Logan, Avondale, and Smith Park for those with a budget of $400 - 500K to secure a 2-4 unit.