All Forum Posts by: LaRon Phillips

Hey BP'ers!  

I live here in Chicago (South Loop) and in doing my due diligence learning about real estate investing I've read the opinions regarding the pros and cons of the various neighborhood classes (A, B, C, D).  I think I have a pretty good understanding of how each class represents different investment profiles and I'm interested in the Class A & B neighborhoods.  However,  I'm having some difficulty conceptualizing what neighborhoods those are here in Chicago. I'm sure that in general, properties in the Loop are probably class A and Englewood is class D as they are essentially polar opposites but with our city being one of so many 'hoods there's a lot of variation in the middle...and I'm feeling a bit stuck! lol.  

I know the grading of the neighborhoods isn't an exact science but I'm trying to get some examples of "gold standards" in each class to help me focus my efforts and develop a better understanding of the nuances of my target areas.  

Thanks in advance for any insights and I hope everyone is having a great weekend!

Greetings BP'ers!

I have a job opportunity that would require me to spend 6-9 months in Chicago and 3-6 months in LA. I’m based here in Chicago and I’m currently renting a 1BR/1BA condo (south loop) and I’m pretty much prepared to buy my first home financially once my lease ends in January.  However with the job opportunity I’m trying how to figure out the best way to manage this while splitting time between 2 cities. Obviously, I don’t want to buy a place that I can’t rent out when I’m away and end up a situation where I’m paying double rent/mortgage during that time. I’m a real estate newbie but here are two of the ideas that I’ve been mulling over. First world problems I know…lol. But any advice/experience is greatly appreciated! Thanks BP’ers!

1) SHORT TERM/FURNISHED RENTALS IN BOTH LOCATIONS

This would be the path of least resistance I suppose but obviously this would pretty much eliminate the opportunity to buy property in Chicago. And buying property in LA? Forget about it! lol.

2) BUYING PROPERTY IN CHICAGO AND SHORT TERM/FURNISHED RENTAL IN LA

This would be my ideal situation. However, the challenge I see here is being able to rent out the Chicago property while I’m away because of the condo association mafias that prevent you from renting out your property on short term basis…and I would assume something like AirBnB would be considered heresy. I guess condos that don’t have a doorman would be easier to pull off since there wouldn’t be anyone obligated to pay attention to who's coming in and out of the building. Otherwise it would depend on who the immediate neighbors are I suppose but you never know who you’ll end up living next to so that’s pretty much a toss up. I’ve heard people talk about avoiding this issue with multi-family units (3 flat, 4 flat, etc) but in the areas that I’ve looked at I haven’t seen many multi-family units that had the “trifecta” of good quality (A/B), good location, and reasonable price point…but then again I’m new at this so I’m probably overlooking the actual potential out there.

I’m doing ok financially: annual income is (and will continue to be) 250K; 100K cash saved. Debt free.

Any recommendations/considerations are greatly appreciated.

(Apologies if I'm posting in the wrong section)

Thanks again!

-LP

P.S. Happy Father’s Day to the dads out there!  

Greetings BP'ers! Over the last few years I've done some "career hacking" to find a better work/life balance for myself. Well I've achieved that goal after 7 years! I've gotten things to where I can work from anywhere as long as I have an internet connection. I've always wanted to split-time between my 2 favorite cities: Chicago in the spring/summer and LA during the winter months of course! Since the job situation no longer requires me to be rooted in any particular place I started to think that maybe I can make my dream scenario of a bi-coastal lifestyle a reality (I know that Chicago isn't technically "coastal" but you get the point! lol). I'm currently renting here in Chicago and I have another year on my lease but next spring I plan to purchase my first property. I'm a total newbie to real estate so this would be my jumping off point. So over the next year I want to take the time and formulate a decent REI plan and make this happen in a way that allows for solid growth financially. So naturally, I'm turning to the Bigger Pockets collective brain for ideas, strategies, life hacks, etc that would make the most sense as I put the pieces together. I'm trying to figure out where the blind spots are in terms of logistical challenges that may arise going forward. Any advice/constructive criticism is all greatly appreciated. Thanks!!

GOAL/IDEA

• Buy my first property here in Chicago.
• While in LA I would find a short term rental there and rent out my place in Chicago using airbnb or short-term corporate rental, etc and find a property management company. The mortgage in Chicago would be covered by my renters which would essentially allow me to avoid paying for 2 places at once when I’m in LA. I’m thinking that renting in LA would be more cost effective due to the super high cost of property there…but this is coming from my limited knowledge of the market there.

QUESTIONS

• Does it make more sense to buy in Chicago and rent in LA or buy in both places?
• What type of property is best to buy in this situation (e.g. condo, townhouse, 1BR, 2BR, etc)?
• What areas of Chicago would it make the most sense to consider for property purchase?
• What are some of the logistical/financial blindspots that you all see or that I should anticipate?
• Have any of my fellow BP’ers had any experience in pulling off something like this?
• Is this plan realistic? lol

Thanks everyone…wish me luck!

-LP

Thanks everyone for your advice and insights!  It's really helpful to have different perspectives.  As with everything in in life our past experiences and upbringing can shape our views on money.  When I was growing up my family was pretty much struggling to make ends meet.  For them paying bills on time and saving a little here and there for a rainy day was their idea of financial responsibility and stability.  Having "debt" was always seen as something negative, perhaps because a lot it was consumer debt in addition to the "debt" incurred by having difficulties just keeping up with the monthly living expenses .  So I think that for me the IDEA of student loans was seen negatively and therefore something that needed to be eliminated like any other "regular" debt by paying it off as fast as possible.  But looking at the situation from the investment perspective, that student loan has brought back exceptional returns...not just financial but social, emotional, personal, etc.  That perspective has somewhat tamed my overwhelming emotional need to pay off the loan before I do anything else. 

Coming from my background I seem to have adopted similar views as my family when it comes to finances.  Not saying that it's an incorrect view per se but rather an incomplete one...and one that doesn't exactly pertain to my situation.  But as I begin to learn more from reading and hearing from you guys I'm starting to feel my paradigm shifting.  

Thanks again BP folks,

-LP

@Ben Leybovich and @James Wise thanks for the welcome and thanks for sharing your insights!  I look forward to learning as much as I can here on BP.  

Ben, I listened to podcast 14 and I'm inspired by your story.  It shows just how powerful the will to succeed can be in overcoming adversity.  Realizing that is really liberating & empowering.

Thanks again to you both.

Cheers,

LP

Hello,

I had a discussion a few weeks back with some friends about finances and such.  They are both married and are home owners.  I on the other hand am single and still renting.  We are all physicians in our mid 30s living in Chicago.  They asked why I haven't bought a home yet and my reply was that I wanted to pay off my student loan debt first.  They argued that I should only pay the minimum on the loans and that there was no need to wait to become a homeowner since I was financially "ready" to buy now.  They also mentioned that I could invest (e.g. real estate, stocks, etc) that money and get a return that "beats" the 3.12% interest on the loan and "net" a better outcome.  A few beers were involved in this conversation so math and hard numbers were somewhat off limits.  lol.  

I have about $90K in student loans at 3.12%.  My gross income is about $250K.  Savings is about $75K.  401K and IRAs are fully funded.  Expenses are about $5K per month. 

I've heard competing philosophies on the subject but just wanted to get others opinions on it.  Pay off the loan first OR pay the minimum and direct more toward home buying/investing?

Thanks,

LP

Hello BP and Happy Thanksgiving!  

My name is LaRon.  I'm 36 years old and I live in Chicago.   I've recently started listening to the BP podcasts and they are awesome!   I have very little knowledge of real estate but I'm excited to learn more and hopefully at some point I can begin to share useful knowledge with others.   Looking forward to the journey toward TRUE financial freedom. 

Cheers,

LP