All Forum Posts by: John Clark

"I’m not considering south side suburbs or South Chicago as my investing areas."
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Why not?

"getting outbid by a lot, all multi units properties getting almost full price offers & close deals (where full price numbers doesn’t make sense!!!)"

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Numbers don't make sense to whom? You? You are irrelevant. I am irrelevant. The market rules. If you are being consistently outbid "by a lot" then your modelling is wrong. Maybe you're being spared the pain of a correction in the future when prices decline to a point that justifie(s)(d) your model, but right here, right now, your modelling is wrong. That said, remember that North Shore and Northwest suburbs, particularly A and B suburbs, have a bigger appreciation factor than lower class areas. That means a model based on positive cash flow gets out bid by someone willing to bank on appreciation.
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"I’ve switch my hunting in to apartments with HoA but seems to be same"

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My advice is to stay away from homeowner associations. They can change rules and forbid rentals, hold you accountable for tenant misconduct, and association fees hurt cash flow. Then there's always the fight between real owners who want adequate reserves and improvement funding, and investors who don't care and fight everything.

"So would it just be smarter to have a long term rental rather than short?"

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Why do people ask questions that are impossible to answer given the information they have provided? Do your homework (as noted above). Analyze your numbers in accordance with your homework information (for example, you haven't told us where you intend to buy, so nobody can give you any information as to vacancy rates), and then compare those results with the analysis of a long term rental.

Not so difficult now is it?

First make sure that the areas you are interested in allow Airbnb. Some wards don't allow it. Then read ALL the City regulations for licensing, number of days that can be rented out, etc. Then crunch your numbers and have VERY realistic vacancy rates. Wrigley can have low vacancy rates as it's a tourist area. Northwest Side and Southwest Side will have high vacancy rates.

Insufficient information. If this is a property that might be sold later on, then go with the real sub-floor, as that will be a plus to an owner. Owners will not want the expense of building a real subfloor, even if just laminate.

"5G will cause, IMHO, massive innovation, just as 3G and 4G did before it."

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Three G was a bust. Only the even-numbered G generations made lasting impressions.

China is already working on 6G.

I stumbled on this thread and have not looked at other responses. Your assumptions, however, are totally false to the point where I say "Crack pipe thinking."

Nobody gets 100% occupancy --start there and your house of cards fall. Also, compare the rate of increase in property taxes, inflation, CapEx a-c-t-u-a-l-s, maintenance, etc. and you AFTER you take into account your own time-value of money to manage the projects (buying Apple is fire and forget and don't pretend that management companies don't need review/discussion)) and the two in theory come out the same.

Risk/Reward. Make sure you FULLY account for the risk, including rent control.

Zeeshan, as other have probably said, and I just haven't gone through the thread long enough, nor do I care to, so apologies aforehand to others if needs be; there is a difference between cash flow and equity. I suspect your real concern comes in two questions as-a-practical-matter;

First is - when does a market correction (which effects equity) overwhelm equity, and;

Second is -- when does a market correction affect cash flow?

Let me answer the second question first, as it is a market timer's question, and one should be wary of trying to time a market for an exit (maybe not so much for an entry, but I can hear the doubters and they have valid point). A market correction will affect cash flow only when it is strong enough to bring down rents. Rents are sticky (section 8, market inertia, transaction costs of moving, etc.), so the market has to move a lot before rents go down. That is you marketing decision. That is your R-I-S-K decision.

Just remember, nobody likes a coward.

As to the first question (which as you can see is related to the second question (as a philosypher (sp?) I knew once said:  "It is all one.')) -- How far down do you think  property values are going to go down in your area?

Finally, and here we cut to the chase -- why and how to you think that you can time the market to the point that you can cut out the capital acquisition costs without cutting the rents?

Answer those questions for yourself and you will answer your original question.

Here endesth the lesson.

Stay away from Illinois in general. The future taxes are going to kill you. There is an article in The Economist of November 16, 2019, about the state of government pensions in general and Illinois' pensions (the worst off by far) in particular ("State of denial"). It is a truly frightening read. When you add to that the fact that the City of Chicago LOST 13,000 "innovation" jobs while other large cities gained thousands, if not tens of thousands of such jobs, then you realize just how much Illinois is circling the drain.

"The cost of engaging a Selling Broker (a Realtor in your corner) is not a cost borne by you and their compensation is typically set by and paid for from the Seller's funds."
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Wrong. The buyer pays everything because the seller factors all costs -- commissions -- into his price. There's no such thing as a free lunch.