All Forum Posts by: Jason Krasavage

Thanks for your response, Crystal! 45 days seems like a long time, no? We can handle vacancy for that long but I was thinking if we close early to middle august, we can have the 2 remaining units rented for Sept 1 move in. Is this too wishful thinking? First mortgage payment will likely be due Oct 1 as well. 

The other unit is already occupied by a long-term tenant that has been there for 30 years. His rent is 10-20% under market value but he is 80 years old and loyal so that's a worthy trade-off for us. 

Thanks John! What makes 4 units so hard to get under contract on these days? We did have to fight a bit, and actually our offer was initially a backup offer because the seller already had an accepted contract 24 hrs after listing. I have been seeing plenty of 4 units though in the past 6 months just typically very expensive and do not cash flow well on paper. At 165k/unit this property is a bargain in my eyes, but it is priced well above other multi family houses in the area and the current price means about 50% appreciation on what the seller got it for in 2016! Appraising at asking is going to be a challenge I think. Tax Assessor appraised it at around $478k last year. I wish we could have bought it back in 2016! But it really is turnkey. Inspection is tomorrow, crossing my fingers. 

2-3% vacancy would be fantastic. In my numbers I'm running a 20% vacancy rate just to account for the worst amidst COVID times and for small repairs on each unit that will eat up some cash flow. And even then, it does well for us.

Hey all, and happy 4th of July! I am currently under contract for my first investment property. It is a 4-Unit on a double wide lot in Jefferson Park, that would be owner occupied by myself and my significant other. The property is a 12-15 minute walk from the blue line, metra stop, and bus stops. As far as commutability it is as good as it gets almost! 

We have enough cash to bring to closing, with plenty of reserves leftover, so of course our biggest liability is getting and then keeping this place rented. The vacancy rate is what either makes this property flow positive for us each month (even while living in it), rely on some of the money we used to use for rent to break even on PITI, or suck us dry of all our hard earned money. So naturally I am worried about it renting (fear creeps in!).

For those that have invested in this neighborhood, what has your experience been with filling your units and what has your vacancy rate been like? This property has a very large and spacious 3 bed 1 bath on the first floor, a 2 bed 1 bath upstairs rear, and a 1 bed 1 bath upstairs front. We would be in the 1 bed 1 bath basement unit. Since it's double wide, in addition to the 2 car garage for us, there are 3 uncovered parking spaces, coin laundry in the basement, and tenants would only pay for electric (heat is a boiler system and there is only 1 gas meter stoves are all electric, and there are large electric ac units sealed into the walls in all units). I would  "bake" into the rent my monthly overhead for the other utilities.   

Any opinions and thoughts on renting out units in this area and on this investment as a whole are greatly appreciated! Please let me know if you want any other information. Thank you in advance. 

I can concur with Home Possible being much more difficult to use now. It's not what it once was. If you make good money and are doing the owner occupied investment jointly with your significant other then you will be above the new income thresholds (seems they have changed drastically). Then if you qualify alone with your income, the DTV will not work out on most good, cashflow worthy, 3-4 flats in decent neighborhoods.

We had planned to use Home Possible when we started looking last year and now we had to go FHA. The deal is not quite closed but besides the 1.75% upfront PMI fee I am happy with how the FHA loan pencils compared to Home Possible. Including our seller and lender credits we are looking at 3% of purchase price down on a 4-Flat a little upwards of $650,000 in a nice, high rental demand, area (Jefferson Park). Although I will say it took a lot of effort to get our seller to accept an FHA loan.