All Forum Posts by: Nate J.

Hello All,

I am looking for a purchase in Chicago and came across a 2 Flat with an illegal (ahem .... non-conforming) basement unit since the ceiling is too low.  Worst case scenario, it will need to be de-converted and the numbers work without it anyway.   I placed the property under contract, but the seller and I have not reached full agreement on a few things yet so I can still back out if necessary.

The problem is when I looked up the records in City Hall, the property has a violation showing.  The inspectors had come to the property back in 2011 and filed a violation for the building out of the basement and the enclosure of the back porch to create extra living room without architects/structure approval/permits, etc. 

The seller had pulled permits back in 2011 to de-convert the basement and do some other items but never paid for the permits or actually done any of the stuff. As such the permits show as lapsed over / open in the city records. Since the work was never done, the inspectors were never called out to close the permits/violations.

My questions are as follows and I would like answers from people who have experience with this:

1.  Does this mean that the inspectors are going to return (if so, when) ?

2.  Any idea on how much the fines would be or how that works?

3.  Would the inspectors require that the enclosed porch area be restored / would I have to get it approved somehow?

4.  Am I just stressing out?  This is Chicago and this is how real-estate works in low income areas, a series of fines and violations with no consequesnces? 

Hey Kyle, Thx for your answer. Hey Bill, thx for taking the time to answer. To clear up your confusion: The purchase price (not loan) is indeed 152K, I just said 150K to round it out.  The loan would be the 152K minus either 20% or 25% downpayment.  The real core of my question was whether there is some common train of thought when it comes to a downpayment.  My thinking is the least you could put down would be best, the deal is leveraged and you get a faster return the cash that you put in.  On the flip side the loan as a whole would have a higher interest rate with the lower downpayment. 4.62% as opposed to 4.12. 

Hey All, I'm trying to get some feedback on a financing question.  I will be seeking financing for a $150k loan as an investor with a standard lending institution.  I can either do a 20% down payment and obtain a 4.625% interest rate or a 25% down payment and get a 4.125% rate.  On the 25% deal, my cash on cash return will be 21.24% ..... on the 20% deal my cash on cash return will be 23.62%. 

My thinking is that the lower down payment would leave me  $7600 cash to invest, while returning my cash on cash faster.  Yes I get a slightly higher cash flow with the lower interest rate and a cheaper overall deal but ....

What would be your deciding factors when making this choice. 

Turns out the iron fence makes a sound when you rock it ...

Hey all, Hopefully I'm posting in the right forum. I'm having some plumbing problem in my three flat and I believe that some lines may need to be snaked. I was wondering if anyone had a good, affordable plumber that they could recommend. The property is located in Chicago in the Medical District. Thanks.

@Ryan @ Jenkins @Carolina. Thanks for the welcome and the input guys. I'm in Cook County, I currently live in the West Town / Noble Square area but will be moving to the new building once the complete rehab is done. I'm at the point where they are still ripping things out : ) Yup, I've heard from a lot of people that chicago can be tricky. I've been thinking about pulling this off for a while now so I was able to pull together a prretty solid team for advice ... hopefully that will keep me out of trouble (at least the big sort).

Thanks Mike and Al. I'll be screening carefully ..

Thx Brandon.

Hello All,

I've been toying with the idea of real estate investing for many (4) years now. I've browsed all the forums and read most of the recommended books. After requesting guidance from a friend who had previous investing experience I finally made my first purchase. I got a 3-Flat foreclosure that I'm in the process of rehabbing / rebuilding. I'm looking forward to forward to learning from this community as well as offering any information I can to other beginners [ I feel like I've learned a lot just making it this far .. although I'm now beginning myself :) ]

My intended strategy is Buy and Hold, but as I gain experience that strategy may be subject to change. Once I get my first property up and running I will be looking into all the angles to acquire my second.

Anyway, enough about me and Greetings to everyone.

Nate