All Forum Posts by: Jake C.

 Two big assumptions here:

1- "so long as the rents hold up"

2- possibly reduce other costs in a downturn

Not saying these are bad assumptions, but they are the difference between surviving a downturn and foreclosure.

If two appraisals are telling you it's a lower value, I'd err on the side of caution here as that is likely the market. You said it, and it's absolutely true, in a downturn areas like this get hit hardest. Even if you bought it at $400K, you'd be into this at $100K per unit....pretty rich for an income oriented approach in an area like this IMO.

@Marco Morales Beware of security deposits. Any half savvy tenant can find a lawyer to represent them on contingency and you WILL get a judgement against you for $5-$10K, easy. The RLTO (Residential Landlord Tenant Ordinance) has ZERO wiggle room; no matter how well intentioned you are, you will not be able to satisfy all the requirements of the RLTO in a way that makes sense.

In virtually every scenario you will be better off with a non-refundable move-in fee.

@Gary Freidman Sounds like a fair price. A 4 bedroom duplex is essentially a house. The paint is what gets you.

@Henry Lazerow is a really good guy.

I have found that buying used is not worth it in the long run. 

Best Buy will negotiate to a surprisingly low margin; add on an extended warranty and you will rarely have problems.

Try @JakeFugman. He is awesome. 

Chicago is consistently overlooked by so many... Specifically C areas.

My approach has always been to avoid installing water meters on non-metered property. My thinking is that it is better to have a predictable cost (my average bill is about $950 for SFR's, including the garbage tax) vs an unpredictable bill where every small leak can cost me significantly more. I've had metered properties that had a large leak in the basement go unnoticed by the tenant resulting in a $10K water bill. This may only happen once in a while, but it sure offsets a lot of the potential savings of a metered property.

I understand that the Meter Save program by the water department will guarantee that your metered bills are not higher than your current bills for 7 years, but I plan to keep these properties for longer than that.

Curious to hear other approaches/thinking/experiences?

Thanks!

All, thank you for taking the time to share your insights!

@Frank Wong Great explanation here. I am curious as to when you decided to stop expanding with debt and to start paying off the debt? What was the tipping point for you?