All Forum Posts by: Justin Ericsson

in my opinion you use companies like home Union to shop around turnkey providers to identify a market you like ... Once you get that far your best bet is to work directly with the provider (actual owner not a broker) to get the best deal. In the past when I used home Union I had to mark up my prices to cover the fees they charge which I don't do anymore selling directly to individual investors. I highly recommend turnkey-reviews.com as an alternative source to find providers to avoid complications. I often refer buyers to my competition if they want a specific market. For example even locally I refer clients to my ex-partner Alex at eliteinvest.com. As Jay mentioned there are only a hand full of markets and providers that have been around for more than 7 years so it's not hard to find the reputable players. I'm now exceeding 1,000 rentals in chicago and will be at 10,000 in less than 10 years. Rule of thumb buy with local broker vs turnkey provider if they have less than 200 homes sold. Experience is everything in this business especially on property management side of the equation.

Jacob,

I highly recommend you leverage minimizing your out of pocket expense so you can buy additional properties and have a cash reserve. I also recommend you determine the desired ROI and buy only at that price point. The best advice I can give you is the following ... "You make all your money on the buy"... If you over pay you can usually never get that money back so be patient and find the right deal. Happy hunting!

P.s if you email me I will send you a cash flow calculator that factors in both debt vs cash side by side to help make good decisions.

make sure you take big security deposits and have mom/dad sign the lease! Students tend to cause lots of damage and don't care about credit!

Zach,

All of our 2-flats in chicago generate $10k per year in passive income using conventional lender with around $50k down payment for 25% down payment requirement. To acquire 10 over time you will need $250k in cash plus verifiable income from a job to qualify for the loans. Assuming a 5 year roll up you need $150k in starting cash from your current job to buy 10 over 5 years. Here is how it works.

Year 1: buy 3 with $150k in savings that each generate $10k per year 

Year 3: buy 2 with $60k earned from first 3 purchased in year 1 (you will only need $60k vs $100k with creative financing). Now you have 5 generating $50k per year passive income 

Year 4: buy 2 with the $50k again creative financing available now you have 7 or $70k per year coming in

Year 5: buy 3 more with $70k again creative financing now you have 10 total and you reach your goal 

Creative financing is utilizing short term hard money with loan that rolls over to 30 years when rehab and leasing is done which lowers your out of pocket expense from $50k per 2-flat to $25k per building which gets you more buildings faster. The trick to all of this is finding the right properties like a market here in chicago that you can consistently buy the $10k per year in cash flow. I'm executing this exact strategy for several of my clients now so if you want to see how it works ring me. You don't have to buy in chicago with this strategy but you will have to search around for turnkey companies that have ample 2-flats to make your goal work. Hope this helps and happy hunting!

I agree with Larry .... Make your home an asset if you can!

I agree with Steve's post it can be easily done with good out of state operator and property management company. Most of my clients own properties in Chicago and live out of state. We handle everything soup to nuts for our clients so there really is no need to be located near the property. I would recommend picking a property management company with at least 300 rentals under management and in business for more than 3 years. 

welcome neighbor! 

Hi Tony... Condo's can be good investments just make sure the HOA fees don't eat up your rental profits. Also make sure the HOA is healthy financially. My first investment was a condo and the HOA was broke couldn't keep up the common areas which hurt my resale value in the end. I highly recommend you leverage your cash so you can expand your purchasing power. Give me ring I will guide you down the path in your local area to find good deals. I'm in chicago but I know how to win deals in any market. First step is finding the right broker and lender to make you successful. Happy hunting!

I currently use Lett's Property Management to manage over 100 rental units as of July 2015.  We are adding about 10 new units to their management team every month and so far they doing an excellent job.  It's hard to judge a management company over one unit meaning if an issue pops up it's easy to say a PM company is bad when they are really not (especially if you are a single rental unit owner like the people above in this forum).  I can tell you having over 100 units managed with Lett's that they do a great job and would recommend them to any investor in Chicago or out of state.  What i like most about Lett's is they are very timely on work orders and provide excellent customer service to both tenants and owners.  Preston and Amber are awesome at training new owners on their software system and if a problem pops up these address it immediately.  Having owned a property management company in the past i would give Lett's 5 stars on investor customer service, 5 stars on tenant customer service, 4 stars on maintenance, 4 stars on pricing (5 best and 1 worst).  I know BP doesn't have a rating system but if they did i would give Letts Property Management 4.5 Stars out of 5 Stars

Pilar... I know lenders in chicago that can help you out if you invest locally in the Chicagoland area. Is that something you are interested in doing?