All Forum Posts by: Josh Sartori

@Luke Stone my first property I purchased has section 8 on two floors and because of how green I was I mistakenly didn't get in touch with the Chicago Housing Authority till if was far too late. Long story short, I had the seller give them their 30 days notice before purchasing the house and it took me 3 months after closing to get them out just so I could begin working on the place they destroyed.

My suggestion review the documents at  http://www.thecha.org/landlords/ very carefully and if you have any questions give them a call. As long as you're using honey instead of vinegar they'll help you in whatever way they can and with you being a southern gentleman, I assume you'll have no problem with that.

@Crystal Smith that's exactly what I ended up doing, except without the help of homewyse.com (great site by the way).

@Brian Moore it's essentially just contractor's statement that depicts the amount of materials + cost of property - my labor. That's where the sweat equity comes in. After the 12 month term it will go into an ARM as I will be holding on to it.

Good Morning BP Community,

I'm currently working on getting approval from my lender to purchase my second property in Chicago (Logan Square) and will be doing so using a loan with 25% down, 10% percent being cash and the remaining being sweat equity. My lender is requesting a report stating what I plan to do to the building, so I sent over a standard contractor's agreement. They didn't like that because it doesn't decipher between materials and sweat equity.  So I'm reaching out to see if anyone has an example of a professional report stating their sweat equity?

Thank you in advance! 

Personally, if I were under I time crunch I wouldn't have the floors sanded at all. I'd have the painters that you already have coming in stain the floors which alone will hide 90% of the scratches you see there and if there's time, have them do a clear coat over the top which will really help with  durability. 

As some others have mentioned the biggest question in my mind is what the bank will say when your offering $25k above what their appraisal says the property is worth. Many banks will only lend on a certain percentage of what the appraisal comes back as. Therefore you may end up having to place more money down in order to get the property, resulting in the question of if it is still worth using an FHA loan.

Hi William,

I faced the same issues when I purchased my first place in the city. I had two floors of a 3 family that was being used as section 8 housing. Those two units were converted into a duplex up at some point and I needed to refinish both floors and put a new kitchen back up on the third floor that the previous owner converted into a bedroom. 

Our bank gave us a one year construction loan which would cover the purchase price and cost of materials, as I was doing the work myself. On this construction loan I only had to pay the interest and at the end of loan term we refinanced into a 30 year. 

Worked out great for us as the we left one unit occupied which covered the monthly payments of interest and kept it cash flowing from day 1. I'm not sure how common this is but it sounds like this is what your looking for. If you have any other questions feel free to reach out.

-Josh

Hey Hope!

Welcome to BP, this place is a great resource for information for us beginners. I bought my 3 family in Logan Square the same way you did, pure luck. Let me know if there's anything I can help with.

Hey Dave, 

Welcome to BiggerPockets, this place is awesome for us Newbies. I bought a place in Logan Square right out of college myself about two years ago so I know exactly where your at right now. Feel free to connect and reach out if you have any Specific questions

Hi @Robert Clark,

I bought my first 3 flat in Chicago right out of college two years ago and its been a huge learning experience. I don't have much of an education to offer you since I'm still new to this myself but what I do suggest is reading the BP Book on Purchasing with No and Low Money Down. Gives you a great high level information on everything from leases to loans... It specifically covers FHA Loans as well as the positive and negative aspects that comes with them. Your first property is quite the adrenalin ride so enjoy it as much as you.

-Josh