All Forum Posts by: Josh Mitchell

@Tony Iaconelli Welcome neighbor! I am located in Naperville, but work in Aurora. BP is the right place to be!!

@Ben Wilson I am open to any right now, but would like to get a SFH or MFH in one of those areas. I am more of the buy and hold type, with maybe a flip somewhere in the future.

@Patrick L. 

Yeah def better to find out now rather than later. I did not account for certain aspects of it, and have added them to my notes for future use. I did include the $167 taxes in the $500/month though, just didn't clarify that in the beginning! Regardless, that doesn't make the propoerty a winner!! Thanks for the help/input again.

Thanks for all the input, again being a newbie, these are things that I need to know and get a better grasp on, so I appreciate it! I will look for a better scenario that will prove to provide better numbers!

And if I could do math I would have put $88/month..........jeez!!

I meant $950-$862 = $94/month.............. Wishful thinking with the $1,000 I guess! Ha!

@Patrick L. 

For the HVAC it is a hot water/stream baseboard, and the units have wall A/C units in them (so tenant pays for usage of them with electricity). I do understand that one of those may need to be replaced at some point in time, but they are new right now. The unit was just rennovated, so cabinets/flooring/windows and other needs, won't be needed. The management fees are covered in the HOA fees though, correct? As for vacancy, I lucked out and have a renter lined up on a two year lease, and I have yet to even close on the property! Let me just throw some numbers at you and let me know what you think.

Unit cost- $86,000

Market Value- $90,000

Property Taxes- $2,000/yr

Down payment- $21,500 (25%)

Rate- 4.9% 30 yr fixed

Mortgage (P&I)- approx. $500 (rounding high for easy figure, based on GFE from bank a little bit lower)

HOA- $340/month, just updated by HOA

Insurance- $271/year or $22/month

Rent- $950/month

$500+$340+22=$862/month in total costs, so $1,000-$862= $94/month cash flow

My thinking could be nieve, but I just believe that I will never have to pay for new roof, damage to the property (outside), lawn care, pool maitenance, etc. With a good renter, who takes care of the interior, it seems to me that this is a win/win for everyone involved.

HOA fees provide as follows: Water, Heat, Gas, pool, common insurance, scavenger, landscaping, elevator, tennis court, basketball court, parking, storage, laundry, clubhouse, snow removal, exterior maitenance, security door locks. (Just copied exactly how it was given) The tenant will be responsible for cable/internet and electricity.

While I know the 50% rule isn't always a direct measurement of things, for this purpose I am going to assume it is. So, being a newbie, it is my understanding that 50% rule simply states that 50% goes to costs of property and then 50% going to debt service (and the remaining from debt service is your cash flow).

My questions is simple, does this apply to condominium units or just SFH? Is it safe to assume that the HOA fees associated with the condo's, cover a majority of the 50% side of costs, which would more than likely be less than 50% of what the rent is being charged. If it does not necessarily apply to condo's, is there a rule to go by with these units?

While the HOA fees do diminish cash flow and can adjust year to year, it seems to me that by purchasing a condo within an existing HOA could actually save you money (no large expenses, i.e. water heater, roof, etc.)

Thoughts are much appreicated! Thanks.

@Ben Wilson Hey Ben! Welcome to BP! I am in the Naperville area and am just starting out myself! I want to get into the Edgewater, Andersonville, Rogers Park area myself. Have looked at a few properties there, just haven't found 'the one' yet. Are you looking to, or open to renting to students then in that area? I know it isn't terribly far from Loyola, and could be an option! Good luck hunting!