All Forum Posts by: Samson Kay

I'm in need of a licensed GC that can work in the humboldt Park Area.

Scope includes:

Correcting slanted flooring

Updated floors

Updated Electrical and Plumbing

Kitchen and bath upgrades

This is for a 3 flat.

PM if interested

Hey biggerpockets community!

It's been a while since I've posted a question I think...

I had a question about wholesaling. In the past when I've marketed for leads, I always had a hard time negotiating for the deal. I found that most sellers inflate the value of the property making it difficult to flip the contract and still leave any meat on the bone for myself, so I always ended up just buying the house and doing the deal on my own. These are for deals I couldnt get for much lower than 70% ARV.

My weak point is on the negotiation side I think. Are there any resources out there like scripts I can follow as far as what to say when im in front of the seller with my offer? I think the seller smells weakness in my offer so i have a harder time reaching an agreement when we are face to face.

Would love to hear what other wholesalers are doing.

Sam

Still Going strong. Although i had to reduce my rent rate quite a bit. Averageing around 65 per day at about a 90% occupancy. So I'm still doing much better than regular rent and make enough to cover my mortgage and taxes, and alot of my operating expenses.

@Rod Witmond Thanks for the insight. So far, i've been able to maintain near 90% occupancy through september and october... So with only 2 months remaining in the year after that. I think I'm doing pretty good.

I have been looking into corporate housing as well which offers many of the pros of airbnb in a longer term (1-3 months) tenant. I'll let everyone know what my research digs up.

Sam

It's true. Airbnb does take a fee. But it's a small percentage like 2%? And the number I report in this post is what I average after fees. I get all the funds direct deposited right into my business account 2-3 business days after the guest start their stay so there's no fees I have to pay to PayPal either. The operating cost I list are all i really have to pay. It doesn't include capex which I'm sure will come up eventually but for now I have now I'm fine while I try to build up a reserve.

I learned practically everything I currently know from BP. Its a good jumping off point to answer basic questions. But if you are looking fore a more structured format for buying and selling real estate, I liked Millionaire Real Estate Investor. 

Originally posted by @Cody Ray:

I've Airbnb'd in Chicago for a couple of years now (and in Uptown, a slightly more established area on the northside). The winter months are much harder; I typically cut my pricing by 40% or so for winter rentals and still end up with a couple months of vacancy (with admittedly little marketing effort on my behalf). This is for a room in my personal unit, so I only rent for 1+ month long periods. YMMV with higher short-term rates but fewer short-term visitors during these months.

Also, Airbnb has started collecting hotel/occupancy taxes for Chicago now and I believe such "transient" usage is defined as any stays less than a month. This may impact your bottom line depending on your target tenant.

 Renting individual rooms I assume would be much more difficult. I've found that the majority of renters I get are either people traveling to chicago on business. Or people with larger families looking for the comforts of home while visiting a new city. I personally think that people prefer this to hotels especially when they are in a large group. Rather than getting 2 or 3 rooms for a party of 6 for 125 a nite for  each room, they dont mind a house with a kitchen they can prepare basic meals in for the cost of one unit, and still experience chicago living the way we do.

Im more or less booked through to october now. with a few days scattered here and there. And I fluctuate my prices daily based on demand. So im just shooting to continue to at least cover all my operating expenses each month or at least the mortgage.

We'll see how it goes.

Originally posted by @Larry Sarpong:

Samson,

This was a really great post! I am originally from Chicago but relocated to Charlotte, NC for a job (and to escape winter) but I come back to Chicago monthly to see my kids and visit with friends/family. Looking at what you've done makes perfect sense except in my case I would like to use the entire building as AirBnb especially since I am in town roughly 7 days per month. Your method makes perfect sense. Thanks again for sharing!

Cheers.

 I think this strategy is a great option for you. You could block off only the days you plan to be back in chicago, and literally manage the building with your phone. It takes some setting it up but anyone can do it.

@Ronan M. Airbnb provides a 1099 at the end of the year. I have the property purchased under an entity, so I'll reduce my taxable income by taking into account all my operating expenses including things like cable and electricity for both units.

Occupancy taxes get deducted automatically before the gross amount ends up in your bank account.

Cleaning fees I've contacted several made services in my area and found that vacation rental turn over can range between 65-100 depending on the scope of work. but it isnt terrible. What I do is tack this cleaning fee onto the final cost of the rental. So Technically the guest pays it. If your having the cleaning lady do things like laundry and folding expect it to cost closer to 100-125. 

I have a 2 nite minimum stay mid week, and 3 nite minimum for any stay that includes friday, saturday, sunday. On average everyone rents for 4-5 days though.

@Ravi P.

No Problem. yes there is a washer dryer on the premises for them to use. I also give them an option to use the parking garage for an additional fee But no one has taken me up on it.

the 300 rental furniture includes:

• A convertible couch 
• coffee table
• end table 
• lamp
• tv stand
• love seat
• dining table 
• 4 dining table chairs
• a desk
• a desk chair
• desk lamp
• queen sized bed
• dresser
• side table

Its quite a bit of stuff. I'm actually thinking of reducing the amount of stuff to open up the space a bit and reduce the cost more.