All Forum Posts by: Jeremy Margaritondo

Thanks for the advice.

Anyone have recommendations for financial planners in Chicago?

@Logan Allec I'd love to discuss. I already found a couple small issues with my first version which I have since fixed :) I've found it pretty helpful so far though, especially when trying to determine my exit options after a certain number of years.

@Zack Karp, thanks a ton. Good to know that the down payments are higher for 3-4 unit properties. I think all options are on the table for us right now, and if the right deal came along and we needed more cash, we could go above that 250. That was just an arbitrary number I started with, not really based on much knowledge :)

@Brie Schmidt had some great advice that helped get us thinking about priorities and what we are looking for. Location is pretty important to us, so we're exploring every angle we can. I just posted about putting together a calculator I've been using to try and help compare various options.

Thanks again. Any and all advice is much appreciated!

Yesterday I posted about how my wife and I are moving from San Francisco to Chicago and looking to do a house hack. @Brie Schmidt gave me some pretty good advice around tradeoffs between price, location, cash flow, etc. and this got me thinking. After discussing with my wife a bit, we both came to the conclusion that location was our top priority. We aren’t interested in seeking out up and coming neighborhoods where we can get the best deals. We want to live in a neighborhood that is great now, even if that means making sacrifices in other areas.

The question for us then becomes, how do we make the smartest financial decision considering this criteria? For example, if almost everything in a neighborhood has a negative cash flow, would this still be better than renting in that same location? Would it be better than buying a single family home or a condo?

I figured the only way to find out was to look at the numbers. So, I set up a calculator and so far it’s been super helpful for me. I figured I’d share it here in case anyone else finds it useful. Another set of eyes or two double checking the math and some of my assumptions wouldn’t hurt either :)

Before I share this, I have a couple caveats:

• I am not a real estate investor. The terms I‘ve used or the way I have this set up may or not make any sense at all.
• I suck at math so please be kind if you find errors :)

OK, if you want to see what this looks like go to the link below and make a copy of the spreadsheet.

https://docs.google.com/spreadsheets/d/1EYNDEJrXiIhljQ3m7lYZ7_gYqKxd0fjDKwFinuyTu3g/copy?usp=sharing

This probably needs a little bit of explanation. I wanted to see what would happen if I took the exact same amount of cash that I would invest in any particular property and invest it somewhere else while renting. I wanted to see what that return would look yearly for each option over the course of 20 years. I figured this would help find any sweet spots from a timing perspective as to when it became more advantageous to buy vs rent.

The first section shows what you would gain on your cash investment if it compounded annually at a chosen rate. The initial cash investment pulls the exact same initial investment number for the property details you enter. I plugged in 5% to be conservative, but it can be changed to anything. We still need to live somewhere so this section also shows those costs and how that would reduce the value of our investment over time. This may be a silly comparison, but I found it helpful.

The second section shows the numbers if we were to live in a purchased property. I’ve been using it to analyze multi family homes, single family homes and condos. It’s obviously not exact, but I feel like it gives a pretty good rough idea.

The last section is where the property details are added as well as any of the other variables that go into the property or investment. The items in yellow are the key pieces of data I change from property to property. The items in blue are calculated based on the other data.

I took some sorta educated guesses for things like yearly increases in taxes, rent, expenses, insurance, and appreciation. Those numbers are all pretty easy to change though if they seem off.

Anyway, have fun with it, and if you find something off or have any advice, let me know!

Jeremy 

@Brie Schmidt - Thanks a ton! I hadn't even considered loan limits :) I assume the problem with a jumbo loan is a higher interest rate?

Any other neighborhoods you'd recommend? I want to stay on the north side, but I'm open to areas outside the ones I mentioned. It's been 6 years since I lived in Chicago, so I assume a lot has changed.

tl;dr: Total noobs looking to house hack in a Chicago north side hood. Need advice and a good agent :)

Hello BiggerPockets!

It’s been awhile since I first joined the BiggerPockets community with grand real estate investing ambitions. A lot has changed since then, and it’s finally time to take the plunge.

My wife and are planning to make a move from San Francisco to Chicago. We’d like to try and buy something and were thinking of looking for a small multifamily property as opposed to a single family home.

We are complete noobs when it comes to real estate investing. I’ve read tons of books, I think I’ve probably read “The Book on Rental Property Investing” three times now, so I have a basic understanding, but not much past that.

Our ultimate goal is to find a place we can live in for 1-5 years and hopefully hold on to as a long term investment when we are ready to move on. We’re not looking for high cash flow, but the place should at least be able to break even when we move out.

Here’s what we were thinking:

• Type: 2 - 4 units
• Neighborhoods: Bucktown, Wicker Park, Roscoe Village, or similar
• Price Range: We’d like to cap our initial cash investment at $250,000. That would include down payment, closing costs, rehab, and any other up front costs.
• Timeline: In an ideal world we’d be all moved in 6 months from now, but we are flexible. I don’t want to pounce on a bad deal just to hit that mark.

I’ve started our search by scanning through and quickly analyzing properties I’ve found on sites like LoopNet, Realtor.com, and Redfin. I’ve come to two conclusions:

1. This is going to be really hard to find. The rents don’t seem to come close to covering mortgage and taxes (holy sh** taxes are high), let alone all of the other costs. We may need to get creative.
2. We’re going to need a good realtor :)

Anyway, we have so many questions, too many for one post, so I’ll limit myself to two.

1. Any recommendations on a good agent?
2. Any thoughts or advice from anyone with multifamily experience in these neighborhoods?

Excited to start this journey and hopefully make some good friends here on the BiggerPockets forums along the way!

@Jeremy Marek My main goal is to get something with 2 - 4 units. I'm just starting to do my research on the market in and around Chicago and it seems quite likely that I'll have to look outside the city to get this...and that's perfectly fine by me.

Wow, thanks for the warm welcome all. This is already getting me thinking and refining my strategy. Super helpful.

@Troy Beebe - Areas like Blue Island are absolutely on my radar. I kinda figured in the under 200 range I'd have to go outside the city proper. I made a deal with my wife though that we would start small :) The only downside is it doesn't seem like a lot of the turnkey places are selling small multi-family out there. To be honest though, I haven't researched much past Elite Invest and Mack. Long term I could absolutely see us getting into larger multi-family, but want to get a few small deals under our belts first.

@Robert Syfert - I've actually thought a lot about the Detroit area, and maybe even Lansing, Grand Rapids or Traverse City. I was thinking those areas as I know them fairly well and have friends or family there who could help. I was leaning more toward Chicago only becasue I tend to travel there more often. I'll reach out to you directly to get more details, thanks for the advice!

@Everyone Else, thanks so much. I'm sure I'll get to know you all more as I get deeper into this adventure.

Jeremy

Hello Bigger Pockets!

I'm Jeremy, a newbie investor (no deals yet) living in San Fransisco. I've been in SF for a little over 4 years now, however I'm originally from the Midwest. I grew up in Michigan (Detroit suburbs), graduated from Michigan State University, and lived in Chicago for 10 years before moving out to California.

I just got married about a year ago and my wife and I have spent a lot of time since, working on getting our finances in order and making plans for the future. In researching investment opportunities I started hearing and reading more and more about real estate investing, and that's why I've ended up here.

Long story short, I've read a few of the recommended books, done some lurking on the Bigger Pockets Forum's, listened to almost all the podcasts, and I'm itching to move on to the next steps. Here's what I'm leaning toward right now:

• Small Multi-family
• Turnkey
• Chicago Area
• Under $200,000
• Safe Neighborhood

I'm leaning toward Turnkey as it seems like a nice option for someone like me who's living in San Francisco and trying to buy in Chicago. How I spend my time is also incredibly important to me. I don't mind spending time doing tons of research and crunching numbers, but I don't really want to manage rehab projects, tenants, etc.

I chose Chicago as the market or a couple reasons. One, I lived there for 10 years, so I know the area at least a little. Two, I have lots of family and friends there. Three, it seems like one of the few markets with turnkey multifamily opportunities. And four, I travel there at least two or three times a year.

Anyway, I have so many questions, but I won't put them all here in this intro. I imagine it's probably better if I post them separately in the relevant forums. So, look out for a barrage of questions coming in from me, 'casue I'm gonna need advice :)

Lastly, I'm a big beer fan, so if you're in the Bay Area and want to grab a beer and chat about real estate, hit me up.

Thanks in advance for all the amazing advice I know I'm about to get form this community and the great advice I've already found here.

Jeremy