All Forum Posts by: Mitchell J.

Am looking at a 7 unit multi-family and will need to speak with commercial lenders regarding financing.  I do not have experience in this since I've only taken residential loans.  Would appreciate any recommendations and/or advice on transitioning to larger properties and the world of commercial lending.  Happy to buy coffee as well if you are local - thanks in advance!

I have a great electrician who does work on all of my properties.  He's very professional, honest, on-time and does great work (and explains to me everything he did so I can learn & understand as well).  Based in Logan Square.  DM me for his contact.

@Jonathan - thanks so much!  I sent you a DM a few days ago.  Can you let me know if you received?  Look forward to connecting.

Hi all, Happy New Year!  I'm looking to convert one of my rentals to an Airbnb in 2022 and would love to speak with anyone who has gone through the process of setting up an Airbnb in Chicago and registering it with the city.  Would love recommendations for Airbnb management companies as well.

Like Henry said, this is highly dependent on the area and the type of property.

A good rule of thumb I like to use in A areas (Lincoln Park / Wicker Park / Bucktown / Lakeview / etc.) is 0.75%.  That is, the gross monthly rent should be 0.75% of the purchase price (e.g. $400K property should get you at least $3000 per month in rent).  Most properties in those locations won't fit this criteria, but many will - you'll need to understand the (1) types of property configurations (2) locations  and (3) the market rent / types of tenants that will work for this criteria.  This rule of thumb will guarantee that you get some decent cash flow that is worth your time, even in these A class locations.  The only exception is you are buying cheap $200K 1 bed condos in these areas... then 0.75% doesn't really matter because you're only getting $200-250 a unit in cash flow which is nothing to write home about.

You can actually hit 1% in these areas as well - with very little rehab and value add.  But the key there is to buy below market value, which is harder to do until you have more experience and connections.

@Jamie Bergstrom feel free to send me a DM and I can help diagnose. Have a lot of experience in pricing and rental out condos (in areas such as Lincoln Park, Lakeview, Wicker, Bucktown, etc) as that’s how I started out as an investor

this is my thinking as well.  I do not want to refinance the whole building.  I have a loan on the current unit that I own, and I'd want to refinance the 2nd unit after I buy it with cash.

I'll follow up with my lender. I think it may be because of the HOA controlled by the single person? But I'll see if there are ways around this. Seems like it should be a solvable thing.

The issue is that my lender is telling me I can't refinance to a conventional investment loan without dissolving the HOA first. I don't mind keeping the HOA even if I own both units - but the issue is with the refinance.

Hi all -

I own a condo in a 2 unit building here in Chicago. I have a potential opportunity to buy out my neighbor's unit, which would then give me full ownership of the building. My plan is to purchase the unit with cash first, and then refinance 6 months down the road so I can pull 75% LTV off of the appraised value. However, my lender said that in order to refinance to a conventional loan... I would need to first dissolve the HOA after buying my neighbor's unit.

Has anyone gone through this process first?  What are the steps involved and the typical timeline?  And how much does a lawyer typically charge to help with this process?

Also - does dissolving the HOA preclude me from selling each unit individually in the future? If so, would I just need to re-create an HOA and then sell each unit?

Thanks for your help.

 Thanks all for the great advice.  I'm going to have my tenants all do the food coloring test tomorrow (below) to see if their toilets have a leak.  If so, I'll know which flapper(s) need to be replaced.  Fingers crossed that it is the toilet since that means it's a very simple fix.  Stay tuned...