All Forum Posts by: Jennie Berger

IF you are planning to keep this long term, the low hanging fruit (for me) would be to duplex down the 1st floor (via a 'lockable door'), add a bathroom and small kitchen, ensure there is a 'walk-out' staircase from the basement to the exterior of the building, and then rent out the 'garden' unit as an Airbnb short term or mid term, furnished. Though this won't count technically as a legal 3rd unit, you can still rent it out and collect income from it as if it WERE a 3rd unit. This makes sense if you're planning to stay put for a while. 

As @Mark Ainley said--if you're planning to sell anytime soon (next few years), your buyers (assuming they are also investors) will appreciate the income producing garden unit but be required to discount their purchase price because it's non conforming / not 'legal'. The benefit of duplexing down is it will be easier for you to get a short term Airbnb permit (STR) from the city, since it's technically your 'primary residence.'

Next, assuming you have already confirmed that you're in an ADU 'pilot' area, I'd check with an architect about the FAR and zoning of your property. Perhaps there is an opportunity down the line to add a coach house over the garage. Then that unit could then become your legal 3rd unit...

Just thinking outside the box. Verify with all necessary parties (obvi) before making a decision. Hope this helps!

Jennie Berger

Hey @Tudor Ancas. We are licensed GCs with the city of Chicago specializing in new construction of SFHs and small multi unit buildings on the North and NW side of the city. Where is your property located exactly--inside the city limits? Also, would you mind clarifying what a '1 flat expansion build' is? I'm envisioning something but it may not be correct. :) Happy to bid the plans for you if it's a good fit for us. Feel free to DM me and we can coordinate that way.

Jennie Berger

Property People

If this tax lien certificate holder (the person paying the taxes on the property every year) is neglecting the property, that 'may' be cause for concern or complaint. I'm not sure what the stipulations are, but one thing I remember from studying tax liens (lightly) a few years ago was that--I believe--you are now responsible for maintaining the property as WELL as paying the yearly taxes. So, perhaps that's something to look into and if I'm correct, contact the necessary city authorities. 

*I can see why they want to hold onto the land in Woodlawn. I would too. :D

Good luck!

Jennie Berger

Property People

Can you actually do this? That is--work for free (assuming she will have no proof of payment because, well, who is going to pay her for this work you speak of since the owner is unresponsive), without a contract/ estimate/ invoice-- and then just put a mechanic's lien on the property? Seems nuts to me....but anything is possible I guess.

My vote is with @Victor So. 

It seems that Chicago doesn't ever have an issue with 'primary residences' being STRs. At least for now. Which--I agree with you Kayla--is totally cackamamey and ridiculous. But what can you do? 

Alternatively, as several have suggested here, in the meantime I highly recommend you list it as an MTR--32+ days. You can do this right away on Airbnb--just choose the 'long term' stay option for your listing, which will require you to rent for a minimum of 32 days. You'll find some really great tenants, less turnover, and a higher rental rate than an LTR using this strategy. At least temporarily until you get your STR license approved.

Good luck--Chicago can be a beast with this stuff!

Jennie Berger

Property People

Until @Jonathan Klemm responded, I thought to myself: "All these people saying it's CRAZY for a GC to charge for an estimate" are clearly NOT General Contractors. :D  

@Marcus Auerbach provided some quality insight and a more comprehensive overview of what a 'walkthrough' and 'estimate' really consist of. It would behoove you to get crystal clear on exactly what you are asking the GC for.

1. A walkthrough with a verbal, ballpark estimate? (probably takes an hour)

2. A walkthrough with a written ballpark estimate? (could take days)

3. A walkthrough WITH a written scope of work and ballpark estimate? (could take days)

4. A walkthrough WITH a written scope of work and CONCRETE estimate? (could take weeks)

5. Do you have your scope of work or are you expecting the GC to devise one? (various times)

6. Are you looking for a detailed, written comprehensive estimate with measurements, scope, and other pertinent details so you can then go shop that estimate around with other GCs? 

I'm sure I missed some here, but the fact is all of these are going to demand different amounts of time and work from your GC. 

There is no one-size-fits-all-answer. Some will charge. Some will not. Some will charge a little. Some will charge a lot. Some may look at it as an opportunity for business and a future relationship. Nobody here is right or wrong or crazy or normal.

Good luck!

Jennie Berger

Property People

@Ben Nantell I'm so incredibly sorry you are going through this. Lots of great advice on this thread from top notch people. Out of curiosity--and I realize the extent of the damage is WAY past this point--did you ever formally apply with the city's private drain repair program? I know you mentioned the city said they came out at some point but you couldn't verify that. Was wondering if that was via this program or something else. Good luck with this!

You know we'll be there!

 Can you please elaborate on this?

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $240,000
Cash invested: $90,000

Purchased a brand new construction single family home to hold onto as a mid term furnished rental. Located in up and coming South Knoxville, just 2 miles from downtown and UT Medical Center, proximity to Great Smoky Mountains National Park, Pigeon Forge, Gatlinburg, Dollywood, TN River, UT Knoxville, and all that is fun about the Scruffy City!

What made you interested in investing in this type of deal?

Having lived in Knoxville for 10 years, I felt very comfortable investing out of state. I've been studying the mid term rental strategy for the last year or so--and started by house hacking in my own apartment in Chicago. Then transitioned to an out of state purchase in Knoxville where I had seen a large demand for quality furnished housing (especially pet friendly) and a vast under supply. I love Knoxville because it's still affordable and not overbuilt / overpopulated. Yet, there are SO many wonderful reasons people move (or travel) here. (Shhhhhhh :)

How did you find this deal and how did you negotiate it?

On the MLS. I bought it through my buyers agent / licensed Realtor.

How did you finance this deal?

Conventional 30 year fixed rate loan from a bank. My own cash (from savings) for the down payment and furnishing expenses. I chose to put 30% down to help buy down my rate as rates were pretty high at the time. 

How did you add value to the deal?

Since it was new construction, I didn't really add much 'value' from a traditional perspective. However, I curated a mid century, modern inspired home using themed furnishings and a unique accent wall in the living room to give it that extra oomph. The real value with this strategy is to find special and thoughtful ways to differentiate ourselves from other furnished rental homes.

What was the outcome?

Secured a 3.5 month rental 5 days after listing it on Airbnb (long term) by a traveling nurse and his 2 dogs. Currently booking my 2nd tenant--2 traveling nurse friends (along with their 2 dogs)--for another 3.5 month stint.

Lessons learned? Challenges?

Having local resources (boots on the ground) is KEY. Though I had lived in Knoxville for 10 years, I didn't know a ton of people in the real estate (and related) industry. I joined a few local real estate investor meetup groups on Facebook and asked them--as well as my Realtor--for recommendations for handymen and cleaning crews.

BIG LESSON--even though Wayfair & Overstock are more budget friendly for furnishing--it might behoove me to furnish from a local store and have them assemble. :)

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

A real estate agent who is my friend from many years ago helped me purchase this property. She was a great resource and went above and beyond to make sure my mind was at ease, and I had everything I needed along the way to make the closing and furnishing process smooth.