All Forum Posts by: Jonathan Satizabal

Has any one paid for a subscription to Chicago Deal Vault, Myhousedeals or other wholesaler websites?

Just wondering if it is worth it or if any site is better.

@John Warren that's actually a really good point. I had the same situation happen last year with a tenant passing away. He was older and lived on his own. He also had cancer and he got to the point where he couldn't take care of himself. Luckily his sister had contacted me so she would go by to clean up and help him out. She was the one that cleaned out the apartment when he passed away. I don't know what I would have done if she had not been there to help out. 

I don't think this current tenant will get to that point but I know it's something that I will need to stay on top of for the next few months until she can get back to work.

Thanks

I have a tenant that recently found out they have cancer and cannot work for at least 6 months because they will be going through chemo. They missed two rent payments because they were waiting on their disability insurance to come in. They have been a tenant for less than a year but have not missed a payment and have otherwise been good tenants. I helped them apply for a rental assistance program and I will probably forgive one months rent to help them out. Her disability insurance did kick in and they did make a rent payment at that time. Just wondering what a good strategy for this would be or if anyone has gone through a similar situation.

This is very insightful. I have not seen this done before but I agree it will probably become more common over the next few years and should probably be considered when planning out new projects.

I got a quote back in 2017 for 50 per sqft plus 500 per gate. I can't imagine that prices have changed too much. 

Are they paying for the cost of the installation? That's a pretty big request they're asking of you and it could delay your closing up to three months fencing contractors tend to be really busy this time of year. I would reach out to a couple of contractors to see if it's even feasible. If you really want the deal you can put the money in an escrow account for a year and have the new owner figure out the installation.

Yes that I s normal. The tenants obligation changes all the time depending on their income. They’re obligated to pay about 30 percent of their income towards rent.

@Jonathan Klemm, this will be @Christian Silva's first construction project, at least one of this magnitude, I'm assuming. Do you think it may be a little to aggressive to take on? Especially in this market where contractors are extremely busy.

I was just thinking of another option. 

Give the property a simple face lift. Clean up the exterior, do some updates, change some fixtures update the kitchens and bathrooms. If you really want to get aggressive add a loft space in the Attic that you can rent out with the first floor unit. You'll just need to install some lights and outlets and some drywall.

Then refinance and take some equity out or get a HELOC that you can by some other investment properties with. The next properties should be 1960's and newer homes, townhomes, or condos where you can get some more experience rehabbing properties and dealing with contractors. All simple rehabs mainly updates with some plumbing and electrical.

After 5 to 10 rehabs you can revisit this one with the experience that you've gained and be better prepared to take on a larger project. That's a little bit of long term thinking added with growing a portfolio.

What do you think?

@Christian Silva, I like the duplex idea for three reasons.

1. There are not a lot of duplexed rentals in Chicago and definitely not in Logan Square. So as far as market-ability it should be a really nice feature. 

2.It should help your re-sale value also, since you would attract more live in owners than investors. Check the comps though to see what might make more sense.

3. Zoning requirements. I am assuming that your property is zoned RS-3 which is for single fam and 2 unit properties. Permitting could be tough if you're adding a unit. 

I can send over a bid form that we use at my w-2 Job. After my last rehab I realized it might make sense to get some more information from contractors. It's similar to an application for a tenant you're just asking for some basic information and it shows that they've put some thought into the project and didn't just throw out a number. I still need to make one up for myself that's more geared towards residential projects.

I would suggest doing a quality rehab and updating the layout or just selling it. Think about duplexing up to the attic instead of adding a unit. But look at what the places are renting for and see what makes sense.

Make sure that you take care of the flooding in the basement. If the sewer line backed up you can add a Flood Control system they run about 8-9k I have this on a couple of properties and they work really well. It's basically a check valve with a sump to move water around the valve.

Instead of getting a construction loan look into a Heloc. You should have got one before you moved out but you may still be able to get one. I think Huntington bank will give you a Heloc on one investment property. When you are done with the rehab you can refinance it into one loan.

I would stay away from a complete tear down. Since you are anew investor, you probably want to tackle some smaller projects before taking that on. Try to keep it simple, make a construction budget and work schedule.

On a side note, Create a Bid Form that you hand out to contractors when they are giving you estimates. 

You want to see who their sub contractors are, if they're licensed and have insurance. Personally I don't care if they have a license or insurance. But contractors will take your money and hand over an entire project to one guy that claims he can do everything. I want to see a plumber, electrician, tile guy, a painter, drywaller, HVAC and carpenter. Preferably two subs for each trade this will let you know that they have additional resources at their disposal. 

Get the quotes itemized this way you can pull items off their list and hire your own subs, but make sure that they understand this. You can have them break it down further into labor and materials. 

Take the time to plan out the project before you get started. It might feel like you're moving too slow at first but it will pay off.

You definitely should have gotten some advice before dropping the 30 day notice. 

I would have started cleaning up the common areas first and let the tenants know that going forward leaving messes in the common areas or using them as storage was unacceptable. I would make a point to show up to the property as much as possible to keep it clean, work on the lawn, exterior, add lighting, paint and clean the common areas. This way they would start to see the quality of rental property that you are trying to maintain. They would also start to get annoyed at how much you are coming around to check on the property and that they can't leave their stuff all over the place anymore. If they're messy inside their own unit you can't really do anything about that but you can enforce cleanliness in the common areas. At that point I would tell them that I wanted to start remodeling the units and give them the option to find another place or if they want to stay that you would be increasing the rent.

This reminds me a lot of my first place. I bet the prior owner walked away with a nice check while you're stuck with all of the problems they never fixed, I inherited a busted sewer line, shut off notice from the gas company, a tenant that wasn't paying rent and they they stole the security deposits. Don't get discouraged before you know it you'll have a nice portfolio of cash flowing properties and this will just be a thing of the past.

I would be very careful about buying a property with a tenant in it right now for this very reason. especially with the eviction moratorium in place. I have had to ask a few tenants to leave but luckily they have always left on there own. I hope you have the same good luck.