All Forum Posts by: Landon Clipp

I have a student rental property that is 1 block away from official campus grounds. That allows them a 5-10 minute walk to pretty much anything of interest.

Whether or not a 10-15 minute drive is too far depends entirely on your market and whether your college is considered a "commuter's school." There is another community college nearby where everyone is expected to drive. It has huge parking lots. But the public school where I am investing near encourages public transportation, walking and biking. It's actually a huge pain to park your car anywhere nearby. If your school is more pedestrian oriented like my local public school is, a 10 minute drive is not something students would choose to do. Even a 5 minute drive really. If they can't walk/bike/public transport to class within 20 minutes or less, it's too far.

I was looking at multiple properties along one street recently and found that even on the same street, a house next to campus will go for about 10%-15% more than an equivalent house just a few blocks down the street. There is a sharp drop-off of the type of renter the farther you go from campus.

@Matt George is right that rent for student housing next to campus is ridiculously high. But that doesn't necessarily mean better performing properties, because increased rent means higher property taxes (higher assessed value) and also dramatically increased insurance rates. Students also cause more damage so you have to factor in more maintenance.

@Jonathan Klemm thanks Jonathan I have considered condo flipping before. Considered buying the place I rent now but the numbers didn't make sense. I will be scouring all of Chicagoland for neighborhoods with good returns.

I half expected Logan Square et al to be difficult, perhaps that is a pipe dream. I have noticed that I can't find any deals that would give me the same returns I am finding down state. The only problem is I have to drive far to get to the properties :'(

Thanks for the great recommendations everyone, what a warm welcome! Please do send me any recommendations for good meetups or podcasts. I am already listening to the Straight Up Chicago podcast.

@Jonathan Klemm thanks Jonathan, I will take a look at that podcast. That's exactly what I'm looking for.

I live in Gold Coast but I am feeling my next move might be a house hack in Wicker Park or Logan Square. I am positioned to buy two properties next year if I play my cards right. I am also looking at pure rentals in any suburbs that have good economic outlooks.

My longer term horizons include Texas, that seems to be the hot new thing nowadays.

@John Warren I ended up investing in Urbana IL. I lived in that area for a large portion of my life so I was intimately familiar with the good/bad parts of town and know pretty well the forces that drive it. I still consider myself a newbie to the Chicago market, which is why I need to educate myself more thoroughly.

I'm excited to get started and learn more!

Hey folks. Wanted to introduce myself. My name is Landon Clipp and I hail from the city of Chicago. I have been wanting to get into real estate for two years and recently acquired a property downstate. I've been having a ton of fun learning and getting involved with investing and landlording.

Initially my goal was to invest in the city of Chicago but I felt that not only were the startup cost very high, but the heavy regulation felt intimidating to me. So I chose an easier market farther away where houses are cheaper and laws more favorable.

I'm looking to get involved in a Chicago real estate investment group so let me know of good ones in the area. I need to learn more about the market so when the time comes I can invest in my back yard!

Your tenant has been living there for 8 years which means that the previous owner either let them live there for 8 free years, or hasn't had problems with them. The latter is more likely. I wouldn't sweat it, this sounds like an easy deal.

I also just recently inherited tenants. They have been living at the property for a reasonable amount of time. I would only be truly scared if the current tenants were there for less than a year. An owner renewing a lease can surely only mean they were at least paid. If they weren't the best of tenants (paying late), you have the option to not renew, or evict, depending on your assumed contract.

I agree with @Aj Parikh that the general advice should be that every tenant is equally and fully liable for the rent, and should each equally qualify for the application as if they were the only ones on the lease. In reality, I have found that there is some wiggle room depending on your market. For instance in my market with student housing, it is impossible to find anyone who can actually pay the entire rent. I ensure that I at least have guarantors that can pay. 

It is also common in my region (in regular non-student housing) that tenants cannot individually afford it without also having roommates because they're living in a much younger part of town where college graduates go to find their crowd. That's why it's highly dependent on what's normal for your market, but for the vast majority of the cases, they should each qualify.

I should also say that there is not a global rule that will smite you from the heavens if you disobey. What you are doing is trying to reduce your risk. It may be impossible for you to find unicorn applicants that all individually make enough to qualify for your income requirements. In that case, you must relax your requirements so you can actually find someone. But, don't lease to 10 drug dealers just because their combined income is enough for a studio apartment... it is a sliding scale of risk that you have to individually evaluate.

I am a layman (i.e. not a lawyer) so take my advice with a grain of salt. You have a contract, so the first thing I'd do is look for clauses that allow you to legally break the contract. The fact that it was supposed to be done in 2 weeks tells me the contract has already been broken, and that you have the legal right to damages. But look at what exactly it says and in what conditions you are allowed to release the contract, and what happens when you do. Does the contract state you are obligated to receive some pro-rated refund if the project was not completed? If not, I'd say it's pretty clear they did not meet their end of the deal.

Your contractor is AWOL, fire them immediately. Ask for them to give your money back. If they refuse, I would pay an attorney $200 to look over your contract and have them tell you what to do. Most likely you will file a small claims lawsuit against the contractor. Very good chance you'll win as they manifestly did not abide by the contract.

Get yourself another contractor and get the job done now. Figure out how to get your money back later. The time your property spends uninhabited is very costly! I personally can't fathom having originally given 2 weeks but actually giving 4 months of grace period.

@Ari Bachrach IMO your first mistake is in letting late payments slide. Payments are due on the 1st. If they don't pay by the 1st, they are late and you should charge late fees.

If he cannot even pay his current rent on time, why would you expect him to pay a more expensive rent on time? Allowing him more expensive rent will only worsen the situation. Don't expose yourself to that.

I recently acquired a property that has a group of tenants who have been living there for about 3 years. I went to the property today to do various things and one of the tenants told me that about a year ago, their upstairs toilet clogged and flooded. The water drained through the floor, through the kitchen cabinet and onto the kitchen floor. It caused damage to the wood above the cabinets (to where you can see through the ceiling) and possibly further damage that can't be seen. Due to its hidden location, this issue was hard to see without someone pointing it out and did not come up in the inspection. 

Since I have no evidence of when this situation actually happened besides the tenant telling me when it happened, how do I approach deducting the repair costs from their security deposit when they move out? The damage is obviously from tenant negligence, but if they fight it in court it would be challenging to prove they were the ones who did it. Perhaps I should deduct and see what happens?