All Forum Posts by: Jennie Berger

Hey Jennifer! 

Welcome to the club. :) I'm always excited to see more ladies getting involved in real estate investing. There are many many places to start-- and I'm sure you'll get a thousand recommendations from various people. One of my top recommendations is to attend a local real estate meetup event so you can connect in real life with various people who share your ambitions. I am not allowed to recommend specific groups on BP, but if you DM me, I will share some of my favorites. We have a ladies specific REI group that meets once per month that may be a good place to start.

Happy to help be a resource as you move along your journey.

Jennie

I have been working with my CPA for about 3 years now. I'd love to make an introduction for you. It's worth speaking with him to see if you're a good fit for one another. Please feel free to DM me for contact info. BP won't allow recommendations here in the threads. :)

Samuel to the rescue! :)

Maybe that area has a certain special restriction of which your architect is aware that I am not privvy to. Typically, RS3 permits SFHs and two-flats, by right. See here: https://secondcityzoning.org/zone/rs-3/ 

Hey Nicolas: Here's where I recommend you start. 

1. Connect with a local architect who specializes in new construction duplexes and get their feedback on the highest and best use of the land, as is. Since your lot is already zoned RS3, you can (by right) build a new SFH or 2-flat. You most likely won't need to rezone, or get a variance of any sort, unless your lot is shaped strangely. (eg, if your lot is not the standard 25 x 125, but some other multiple where the width is actually skinnier than 25, and the lenghth is longer than 125, and you want to reduce side setback requirements, eg.) 

Additional Resources to check, 'FYIs', in case you want to learn more about rezoning in the future)

-Look up your address on the city's zoning map here to see how properties in your immediate vicinity are zoned. If you see at least a few zoned in the designations you mentioned above, that's potentially a good sign that you can get support from the local Alderman's office, and approval by the ZBA (zoning board of appeals), to rezone.

-Reach out to your Alderman's office. Speak with the director of development (they're not always titled that way, so just ask for whoever deals with area developments, new construction, rezoning, etc.) to ask if they'd be supportive of your plan. Your plan can be something rough like: I own a piece of vacant land at (address), and I'm looking to rezone it from (current designation) to (new designation) in order to build a new construction duplex which will consist of  2 condos for sale, or 2 aparment rentals, eg. Is that something the Alderman would be supportive of? *Again, this doesn't seem necessary on your current lot because you are allowed to build a 2-flat, by right, on RS3 land of that size.

-If it's determined that your Alderman would be supportive of your 'plan', and you've already connected with a local architect, you'll then want to reach out to a zoning attorney. Your architect can recommend someone they like or find your own. 

*Note you do not need a zoning attorney, but I highly recommend you work with one. 

*Also note that Aldermanic support is not required for a zoning change approval by ZBA. But I strongly urge anyone to always get Aldermanic support before proceeding because it makes life--and the entire project / process--a whole lot easier. :)

IN SUM: Based on what you've shared, it sounds like you won't need to rezone if you just want to build a duplex. Check with an architect first to be sure you can fit your vision into the existing lot, as it's zoned currently. If not, then the path of least resistance is to simply adjust your vision so it fits better into the lot, as-is. :) A zoning change can take up to 6 months, approval isn't guaranteed (despite Aldermanic support), and potentially cost a lot of money (architectural site / floor plans & dimensioned elevations, zoning attorney, holding costs, etc.) 

Hope this helps. We're here if you have any other questions or would like to consider working with a design-build GC on your project. We specialize in new construction SFHs and small multi unit buildings in Chicago. Good luck! 

Jennie Berger

I would echo what @Joe Freeman & @John Warren wrote about shorter term / mid term tenants. Studios are IDEAL for individual travelers coming to the city for a 32+ day stay. 

I would say the bulk of these travelers are traveling medical professionals, international & U.S. based students on internship / rotations / abroad programs, business travelers (esp international travelers), and traveling theatre troupe individuals (think about the actors who come to Chicago for Broadway tour shows by themselves).  Rental income can be anywhere from 50%-150% more than what you'd earn as an LTR, depending on your design, location, whether or not you have an in-unit washer/dryer (uncommon in older highrises), proximity to the El train, and complimentary (or easily available in-building) parking along with being pet friendly.

This said, the biggest hurdle with highrises in addition to HOAs (which can go up and/or CHANGE at ANY time) is the rental restrictions. Make sure you understand them clearly and know what you're getting into. Have a plan A & B. If plan A is a mid-term furnished rental-- and for some reason the HOA changes their restrictions-- then you'll want to make sure the numbers work as an LTR. Prior to purchase, of course.

If you go the MTR route, your design should kick a$$.

Good luck! :)

Jennie

 EXCEPT Chicago LOLOL. Nothing moderate about the taxation and governance here. But still, it's a WONDERFUL city and I cannot help but love it! :)

@Pete B. It is my firm belief that there is a market for every type of layout in the mid term space, especially when you're located in a major city like Chicago. Mid term renters come for ALL types of reasons. Many are travel medical professionals, sure, traveling alone. But many travel med profs travel as a couple, with their families, with a pet(s), and they want or need extra space to spread out. Many mid term travelers are families relocating to the area, displaced families (homes have had water or fire damage, or are undergoing extensive renovations, eg), international business travelers, families from out of state visiting their family here for a few months...all types. Having a parking spot is a fantastic bonus, and being pet friendly will open up your space to many more renters too.

@Brandon Victor I'm not sure where to start, nor do I honestly wish to relive the nightmare of those 2.5 weeks. Suffice to say that speaking with someone who didn't push me off to the next person--and who spoke English cohesively and fluently--was impossible. Ultimately, I had to dispute charges with my credit card company because I couldn't even get ADT to acknowledge that they messed up and to refund my money for services I never received. Shameful company. I know ADT used to be great. Growing too big can sometimes be the demise of what was once a wonderful company. I believe this might be the case here.

Hey @Kenneth Jiang - Welcome to the game! I'll provide my two cents on your questions above--please bear in mind this is a complex topic, and there are no black and white responses. If you'd like to chat about anything further feel free to DM me and we can set up a call. 

1. Finding the Right Deal: How do you all evaluate properties for development in Chicago? Any tips or tools to help a newbie like me spot a good opportunity? 

We start with the end product in mind. What do we want to build? Then, we look for properties that can accommodate that type of structure AND are supported by the ARVs in the neighborhoods in which we are searching. We are able to estimate construction costs roughly based on previous builds. We'll then build a spec sheet (templates we have created that are always evolving the more we learn) and then insert all of our numbers into our deal analysis. This deal analysis factors in everything from purchase price and buying costs, to holding costs, construction costs, and selling fees plus hold times. Finding good opportunities for new construction in Chicago is possible, though you'll need to work a little harder in your search and due diligence than if you were to simply rehab a hundred+ year old bungalow. Hundred plus year old homes are everywhere. Land and tear downs on properly zoned land are far and few between. Starting with a great Realtor to help you on this search can be invaluable until you learn more about how to search for the 'right' type of land for what you want to build yourself.

2. Hiring Help: I'm at a bit of a crossroads. When it comes to contractors, should I go with a General Contractor and a fixed contract or consider a Construction Management company? What are your thoughts and experiences with these choices? 

How much time do you have and how in the weeds do you like to get LOL? Since you mentioned you're new to the development world, I would strongly recommend hiring a General Contractor (GC) (at the very least) to build. If you have no previous design and planning experience, I would also recommend considering a design-build firm that can offer both design and planning assistance AND construction. You can always hire a designer separately from your GC as well. Architects can provide a fair amount of guidance on how to create the foundation of a design for your property. But they are architects, rarely designers. They are also not 'home buyers', so when you design something from scratch to SELL, you'll need to keep in mind who your end buyer is, what the comps look like, how much you're planning to sell for, etc. That--in large part--will dictate your design. 

3. Materials Matter: I'm curious about sourcing materials. Should I take on the task myself, or is it better to let the pros handle it? Any shortcuts or tech that's made your lives easier? 

Again, how much time do you have on your hands? Sourcing and ordering materials is extremely time consuming. Then, after sourcing and ordering, you have to setup and manage the delivery. I'm making it sound a lot simpler than it is, I know. The pros of ordering your own (finish) materials are you will save some money (maybe, depending on your supplier list and what types of discounts they offer you) and likely have a lot more flexibility to choose what you want, as opposed to getting a few options presented by a GC. The biggest drawback / con is paying a premium for your GC to source all the materials--they'll charge a markup on these since they now have to navigate the whole process above. There's a nice blended option you can try, where subcontractors will supply all rough materials, and we (we are licensed GCs now but prior to being GCs we were rehabbers who hired a GC) supply all the finish materials.  The easiest, most streamlined way IMO is to let your GC handle as much of the process as possible, rather than piecemealing it out. This way everything stays on the 'same' schedule. ie: your GC isn't waiting for your materials to arrive because you ordered them too late...

4. Global Sourcing: I've heard whispers about sourcing materials overseas for a better deal. Did anyone try this? Is there any tool that makes global sourcing easy? 

Some of the materials we order come from overseas. We do not order directly from these manufacturers however, we always go through a US based sales rep. I do not recommend going directly overseas unless you have a contact in that country, or you've lived there, or are familiar with it and/or the language. The money you *may save could end up causing you more time and frustration than it's worth.

SUMMARY: For your first new project, hire it out! I realize it may be tough to make numbers work nowadays, and that's probably why you're tempted to take on the role of contractor to some degree. Working with an experienced team will provide you with a lot of insight and learning opportunities that you can then take with you to Project #2...