All Forum Posts by: PJ Kolnik

@Derek Luttrell I could see that other expenses being the case as well. At this point, I will be self managing and doing repairs myself to keep those costs to a minimum. I definitely looked at this deal and thought its a good deal but not a great deal - definitely had the right mix of things that I felt confident to tackle and learn the skills I was going to need when the market is once again favorable to investor purchasing.

Before this my wife and I were living in a Condo in Bucktown. We pay about 2200 monthly living expenses there and are planning on using airbnb to cash flow that property.

I like your style on the 3/2 situation with the roommates, sounds like it is working relatively well for you.

@Derek Luttrell Thanks! I purchase this building off the MLS with the Berdan Real Estate Team (http://berdanrealestate.com/)- can't say enough good things about those guys, honest and have a great understanding of multi family:

Why did I chose this place:

https://www.redfin.com/IL/Chicago/2441-N-Avers-Ave...

1) Solid Brick Building, good level floors, dry basement with no evidence of water problem (until I had my pipe problem above, but kind of my fault), previous owner was there for 26 years and was diligent in taking care of things like the roof and tuck pointing.

2) Location: nice B- class area that has good middle of the road renting options. IMO lots of the A class rentals are overpriced right now and you could be really exposed in a downturn if you were forecasting on rentals that are in the 2,000+ dollar range. I had to really evaluate how close I needed to be to the blue line and what I could afford - what really got me there is that I think rideshare has lessened the overall need to be close to the train, rideshare is starting to become very competitive price wise across Chicago with CTA and it can really shift the "I have to be next to the train" mentality. Its also close to our church community that meets at the James Monroe Elementary School nearby on Sundays.

3) Value Add: Option to add another bedroom to the Garden unit when tenants are ready to move out, option to add laundry to both units, option to add some curb appeal to the front of building.

4) Appreciation: This area of Logan Square still has a lot of potential for appreciation in my opinion as it is still far enough from the blue line that its price hasn't been hyper inflated. An almost exactly the same layout 3-flat was showing the same time, but it had been really spruced up sold for almost 80k more.

https://www.redfin.com/IL/Chicago/2505-N-Springfie...

5) My wife and I liked it and did the 90 day bigger pockets challenge when they brought it up on October 1st. Her jaw dropped initially when I said I wanted to do it, but now she has become the best teammate.

Price: 506,000

Type: Legal 3-Unit

Financing: FHA - 3.5% down with a 3.875% interest rate.

Down Payment: Approximately $13,500

Total Monthly payment: Approximately $3400 (getting ready to make the first payment on Feb 1)

Estimate Repair and Updates Budget: $20,000

Rents:

Unit 2: $1700 (estimated, and being spruced up to hopefully get it there)

Unit 1:  $1400 (This will be my owners unit - this is what I will "pay" to the building)

Garden: $900 (current long term month to month tenants, I'd like to raise this to 1100 when they move out right now I need cash flow though in the winter)

Parking????: 150/month - after being over here doing updates I am realizing that parking is actually really difficult in the immediate vicinity, could be a great value add.

Estimated Rent Total: 4000 / month

- Payment (PITI): 3400 / month

- Other Expenses (Trash, Water, etc.): 250 / month

Total Estimated Cash Flow = 350 / month

Estimated CAP Rate: 6-6.5%

@Mark Ainley thanks for the tip. While the translation softwares are helpful they’re not always complete in transferring the full meaning. I would be concerned that an electronically translated lease would modify the legality of clauses through incomplete or incorrect meaning. I was able to send my welcome letter using google translate when I bought the place but other than that I would be hesitant to use it for legal documents.

@Michael Noto I agree, I actually spent a good 4 hours last night building this folder structure in Google Drive last night. The amount of competency and confidence that I feel that I gained from getting organized was awesome. I definitely feel like getting organized in this way has really helped me figure out some of that - "I don't know what I don't know"

@Daniel Hyman that makes sense. Do recommend I "pay" myself for Property Management as a self management landlord?

Hey everyone, I just wanted to say thank you for all the support so far. I was able to close on the property on 12/18 and have been working on some updates and trying to get the place cleaned up a little bit.

A few stories and lessons so far...

It was COLD this week in Chicago. The current owners had a 10 day lease back from me over Christmas, they moved out 12/29. Sometime between 12/29 and 12/31 the batteries in the thermostat died and the furnace shut off. What a nightmare it was to come in on that Sunday and see my breath in the top unit. I immediately opened all the faucets and tried to get a drip going with one faucet froze up. I called an HVAC guy that helped me get the furnace going - did you check the batteries???? (lesson number 1=duh), but he also showed me where all the water shutoffs were - super helpful since I had a pipe burst/break ever so slightly that was on the exterior of the unit and flood the exterior back porch with ice for the 1.5 days I was gone until checking on the property again. I cleaned almost 2 wheelbarrows full of ice my covered porch back steps on Wednesday night for about 4 hours. I was glad to have listened to the podcast that week that helped me set my attitude - "You do not control what happens in your life, only how you respond."

I met my inherited tenants in the garden unit and they are really great people so far. They pay on time and in cash - thinking pay near me might be a great option for them. @Brie Schmidt do you by chance have lease documents and disclosures in Spanish? My tenants are great so far but the language barrier makes some of the communication difficult.

I currently have an empty unit that I am doing some work on and targeting Feb 1 leasing for a confirmed tenant while I get the top unit painted and move into that one.

@Daniel Hyman - I was looking at your Tax & Accounting folder suggestions and saw the "PM Statements" what are these?

@Daniel Hyman good ideas - this is a great place to start. I'm think I will put correspondence documentation in a subfolder labeled with each applicant's names in the rental applications folder and then just drag those personalized folders into the "Leases" folder when they become a tenant

@Daniel Hyman thanks for the advice! Do you have further advice for documents associated with overall management of the property as well?

Hi Bigger Pockets, I've just purchased my first 3 unit property in December and I am reading through The Book on Managing Rental Properties by @BrandonTurner. I'm realizing my need to be as organized as possible up front when it comes to all the paperwork associated with the property.

Does anyone have any good systems of organization such as their digital folder structure, your method for organizing your files, or just overall tips for organization?

I appreciate all advice you can provide for great systems and organizational lessons learned.