All Forum Posts by: Joe Cantanzriti

Charlie M. Unfortunately this is far too common of a scenario with short sales. Having a cooperative seller/owner is a huge piece of the short sale maze that really helps especially if this is first one. There are plenty of deals out there so keep on hitting them hard and you'll get one to stick. Plus that short sale house will be popping back up a foreclosure it seems here in the near future for you to grab it.

Absolutely.... I just did the math on what I still needed to replace. So for me, I replaced the roof immediately upon purchase so here's what mine simple analysis looked like.

**Divide # years down to a per month cost.

Roof - 25 years - ~$9,000 - monthly cost $30

HWT(2) - Replace both with 3 years most likely - $2,500 - monthly cost $70

Electrical - Replacing both panels in year 2- (now already completed) $2,000 - $165 / month in first year

Furnaces/AC - replacing all within 5 years - (one replaced now) - $5,500 ~$90 / month

So this is certainly not an exact science but this was how I originally looked at it (after purchase) ... not sure if I would have bought it had I thought all the way through it but it got me into the game and has worked out great for me. Just haven't made much money on this one yet.

So to sum it up, I budgeted $325 a month to replace the items that I needed to over the first 5 years.. I subtracted the roof out and added that $30 to my overall reserves since my plan is not to hold it more than 5 years for this property. So basically my $325 a month that I needed to just handle these specific items really cut into my "cashflow" that I originally thought I had. I had a cashflow of about $450 after all other expenses, vacancy, etc. So I actually only have a cashflow of something like $125 on my duplex since I know I'll need $325 a month out of that to do these major repairs. I did completely renovate the rest of the units, kitchen, baths, floors, etc so I don't expect to have major expenses aside from the ones I mentioned.  

Sounds like property management will be the make or break on this one, if managing yourself it would probably provide an excellent real estate education that's for sure. I own an older duplex that has great cash flow like this, something close to "3% rule" which on paper does equate to something like a 40% ROI..... however the CAPEX is what I overlooked on the older and cheaper property as many forums posts discuss here on BP. It's well worth taking a deep look at the roof, furnaces/ACs, Electrical, etc and put together a quick spreadsheet of when they realistically would need replaced along with a cost for that replacement. Even though you are hitting that 4% rule, when you need a roof, that cashflow for 3 years is gone to pay for the roof. I bought a very similar deal and have made out ok so far however I vastly underestimated the CAPEX.

@Mary Ann  I do exactly that as well.... I own a couple rentals in Northeast Ohio where I'm originally from and I rent on the northside of Chicago. Works great!

@Monty Nafoosi   So true.... but still lots of opportunity here!

@Tito Q.   Welcome to BP! I just moved to Chicago and most of my work I'm doing is in the south suburbs... not exactly great with knowing the neighborhoods quite yet but where are you looking?

@Jonathan Kelly

I love those properties down by the park like that one on Volney.... would love to rehab one, just like you said hard to make any sort of numbers work for an investment. Still there are some amazing properties down  there that will unfortunately just be lost in history. We need to get a major employer or some corporate offices relocated to the Yo for those areas to ever rebound, and that would just be a start.  

@Elbert D. Absolutely, send those properties my way as you get them! We aren't taking on any jobs yet for others as we are slammed with our own flips right now and still need some time to oil up the construction machine before we start reaching out to other investors to handle the construction for them. Everything we are working on right now is single family residential and a couple condos but I'd certainly be interested in looking at multi-family as well. 

@Elbert D.  

I just recently moved to Chicago to take a position as the construction manager for Fischer Real Estate and that's all we do is rehabs in the Chicago burbs. Should be in the 40-45 project range for 2017. Not sure if you're looking for someone like us to sell properties to or if you're looking for a General Contractor but certainly feel free to reach out to me. 

Garrett May I actually owned a property over near yours by the university that I rented out to a fraternity. It actually worked out really well for me and I only sold it because it was owned with a partner and he needed to sell it. That area in my opinion actually could be a long term appreciation play, now I think long term could be 10-20 years at the rate Youngstown moves but the university has to improve I would think so student housing could be a good play over there. I would love to meet up though that may be tricky, I just moved to Chicago about 3 months ago so I'm only in the Yo on occasion now. Still will invest in my 44512 zip though, love the cash flow and my comfort with the area doesn't hurt.