All Forum Posts by: Jonathan Satizabal

I would estimate the cost of a garage/ADU at 150k-200k. I don't know if it is worth it from a investment stand point. It my pay off with an added appraised value down the line. I would ask if the ADU would increase the value of your property by at least 200k? I thought I read that rents were going to be capped for ADU's in Chicago at about 1200 a month or only some ADU's would be approved only as affordable rental units based on an area's median income. In Chicago they cannot be used as short term rentals or Airbnb's. I'm not sure what Evanston is doing.

If you are looking at it as an investment, I would say take your 150k to 200k and invest it somewhere else you will probably get a better return with less work and less risk. I think the best ROI for an ADU is in a basement or attic unit. If you have a large property maybe look into a prebuilt or modular home that you can just drop on your land, or if you are handy you can build one yourself.

That’s interesting. I bought a couple 2 and three flats one in 2007 and one in 2012 and I never got a zoning cert or maybe the title company saw it but I never did. 
My attorney said it’s taking over two months to get them now so I’m thinking you should try to get it as soon as you decide to sell.

I do have one client that applied for it in early January and we still don’t have a response. The longer delays could be due to the Covid shut downs.

@Brie Schmidt thank you Brie, I was assuming that was the case but I couldn’t find any information on it. I saw that coach houses were grand fathered in but nothing that specifically mentioned basement or attic units.

The city of Chicago now requires an owner to provide a zoning certificate upon sale stating the approved number of units. If this wasn’t provided, would it affect your decision to purchase a property?

Should an owner with an existing non-forming unit get a zoning certificate?

Would you purchase a property in Chicago with a non-conforming or illegal unit? What are your exit strategies if an issue comes up? What are the insurance or legal risks? Would you purchase the property valuing it with the additional income or value it by its legal status? Let's assume that the ADU ordinance will not apply to you.

I think misunderstood your question. Are you looking for funds for an investment project or purchase?

Or are you looking for money to pay rent and back rent? Below is a website for the ERA program. Looks like the program is not open yet, for applications.

There are always private charities and some state programs that assist with rental payments, without the ERA program.

Catholic Charities and Facing Forward just to name a couple. They probably won't provide as much as the ERA program. I've seen these charities provide a month's rent or pay a portion of rent while a tenant is transitioning between jobs or waiting on unemployment.

It is good to stay up on who provides rental assistance because you can always direct a tenant to them if it looks like they are going to need some assistance. The housing authority of cook county also had some information on the website but all they said was they were working on rolling it out. 

https://www.illinoislegalaid.o...

That's some valuable information you're asking for. 

Home | GRANTS.GOV

This website lists the grants that are active and proposed. Most of the ones I saw are geared more towards non for profits that are involved in housing and other aspects of community development. The majority of programs that I've seen, in cook county also require that the participant be a non-for-profit organization or a private investor partnering with one. This grant list, although it may not apply directly to you, will give you an idea of where the money is going.

Where I have seen as the advantage to private investors, is through lending programs such as portfolio loans, loans for down payment assistance and some acquisition assistance of vacant properties and distressed properties. The majority of government money will go to organizations that are already established. As individual investors we should see some programs coming through local housing authorities, local governments and other non-for-profit organizations. 

Find your local housing authority.

Start looking at the qualifications for the programs that are offered. Contact information for the programs are often listed on the websites.

You can also follow projects that were already granted. There is an opportunity to take over projects that other people could not finish, but you need to stay in contact with the individuals that administer the programs.

There are a lot of links in the website to other websites, programs and organizations in this space. I learned all this from a YouTube Video and a little research. There's a lot of information in these websites you need to be patient and spend some time to dig it out. AND TAKE NOTES! You will come across good information that will be hard to get back to if you don't.

NHS Home | NHS Chicago

Low Income Housing Tax Credit - IHDA

Housing Authority of Cook County | CookCountyIL.gov

IHDA - Illinois Housing Development Authority

Funding Opportunities | HUD.gov / U.S. Department of Housing and Urban Development (HUD)

I noticed that it comes in waves. So when times are good make sure you’re putting your cash flow aside. And take it as a learning experience. I like to see at least. $500 a month positive cash flow on single family homes. That’s before putting money aside for capex, vacancies and maintenance. That gives me about 3600 a year in an expense budget and about 2400 a year in true positive cash flow. Putting away 3-4k a year for expenses should give you a nice cushion to keep your properties maintained really well.

It really does seem as though when issues come up they all come up at once and then things calm down again.

Just keep learning and moving forward. Remember you’re still paying down your principal and the expenses are a write off and a great tax deduction. There’s some years when I wish I had more expenses come up to lower my tax bill, you’ll see. It’s no big deal just part of the game. 

Personally I wait for tenants to move out. It’s a good time to go through your rental and make any updates or repairs if needed. Touch up paint, replace faucets, etc. I know some areas they do show right away but the turnover is usually higher. My tenants are typically in there units 3-5 years so the units need some maintenance when they move out.

Some people are doing virtual showings. 

I had a HACC rental back in 2017 I never used that form but they may have changed their procedures. You may not need to do that form since you are doing a rent increase. I would read through your Housing Authority contract it should state in there what to do when you renew the lease.

In Chicago, the Housing Authority responds better through email. They usually get back to me in 24 to 48 hrs with any questions or requests. I would try emailing them and the case-worker. 

Sorry Sam, I was thinking you were on the Chicago Housing Authority website. The HACC has its own website and procedures.

I found this Rent Increase form on the HACC website. It has some instructions on it, try submitting this to the case worker.

https://thehacc.org/wp-content...

As far as the lease I don't resign leases with my section 8 tenants. If your tenant is pushing for one just refer her back to her caseworker. Section 8 has so much authority over the rental that the lease is pretty much pointless. You can do a month to month lease just so that you have something on record if you need it. That's how I do it.