All Forum Posts by: John Clark

@Thomas Rutkowski

  Your ROI on cash used to pay down a mortgage is ZERO. Compare zero to whatever you can do with all that money.
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Not true at all, and particularly so in original poster's situation.  First, the OP stated that he was paying PMI, so the elimination of the PMI is a return on his "investment" -- mortgage pay down -- and that's before we consider what the rate is that he saves by paying down the mortgage. Let's say he paying 5 percent interest and is in a 20 percent tax bracket, and alternative minimum tax is not applicable. His effective interest payment is 4 percent. He has to find a 5 percent return investment (and pay one percent of that in taxes (1/5 of 5%)) just to make it a wash. And that's not considering the PMI savings he gets.

So paying down the mortgage is not a zero ROI: It's mortgage rate plus whatever rate the PMI savings works out to be.

The sale proceeds is not a loan. It's simply an asset. Where is his greatest return? It depends, but he's got to use a proper analysis first.

@Michael Norris

"Calculate the property taxes out to the monthly number then submit another offer at $101 over asking price and put in the comments..."Your property taxes cost you $XXX over the last 30 days are you ready to sell yet?""

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Asinine statement and I'd tell you that you just revealed your ignorance of economics as well, making me all the more not willing to sell to you. Reason: Taxes get pro-rated, so by paying the taxes, the sellers just re-set the pro-ration clock and saved money. Remember, you're going to pro-rate at 5 to 10 percent above last year's level in most cases, so if I re-set the clock by paying taxes, I saved myself a 5 to 10 percent surcharge.

"Is there a city program that encourages new-build affordable housing?"

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The mayor is pushing for affordable housing even though Chicago does not have an affordable housing  problem. People seem to think that gentrification is evil and poor people have a right to live in expensive neighborhoods simply because they could afford those neighborhoods before. I guess that upping sticks and moving as a result of market forces is a violation of human rights.

So there should be an increase in supply, but you will be better off for it if the new supply and new people coming in begin the gentrification process in your area.

"Hello All! I want to jump on this thread but go in a different direction regarding wholesaling in Chicago. Are there any recommendations for the best title companies for wholesaling in Chicago?"

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Your question makes no sense. Title companies sell title insurance, and their goal is to not pay out by means of discovering and disclosing all of the flaws in your potential title so they can except them from coverage. You get the exceptions waived, eliminating the flaw, by new recorded documentation, better information, etc., thereby giving you clear and marketable title. 

Wholesaling has nothing to do with it.

"In everyone's opinion, what are the best up and coming neighborhoods in Chicago to invest in real estate, whether they be single families, multi families, apartment complexes, etc."

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Define "best" persuant to your own criteria and let us know. Otherwise your question is hopelessly vague.

Check with the building management for a list of approved contractors. They may not let Joe Schmoe screw around with plumbing or electrical -- danger of leaks, fire. etc.

I recommend renting only to graduate students (masters and doctorate, law school, etc) at first. Once you get some experience, expand into undergraduates.

"The question Desmond raises, among others, is whether a home is a right or a privilege."

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Housing is a human right. Where that housing is, however, is not a human right. Forcing one person (a landlord) to bear the cost of housing as a right (rent control) is wrong also. The costs of human rights should be borne by society in general.

@Trudy Pachon

"What are the alternatives? Affordable housing? Some type of system that allows folks to live in their neighborhoods even when prices go up? It has to be a collective decision that we say, "Hey, people need a place to live where they have family, jobs and roots. . . .  ." 

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Let me play devil's advocate here: Why should we value -- to the extent of preventing gentrification -- living where one has family, jobs, and roots? Where, also do we draw the line? The family just moving in has the same rights as the family that has lived here for 40 years? No? Why not? Children grow up and move away. Why can't families move? Make new roots in new places.

To improve a neighborhood is to make it more desirable. Rents go up. If you want to subsidize people (and not force landlords to bear all the burden via rent control) then you want the government to say "[t]his person's family, jobs, and roots is worth subsidizing, but that person's family, jobs, roots, is not worth subsidizing."

Or you can build public/affordable housing.

@Lisa Parker

"The problem I have is when all the predatory lenders show up and push products on residents that they KNOW these “customers” can not afford."

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I have a problem with that too, but the bigger problem is "customers" who won't use basic  eighth-grade math to figure out that the deal is bad for them. The biggest problem is "customers" who won't shop around.