All Forum Posts by: Robert Clark

Hi everyone,

What would you do? 

Scenario 1: You are approved for 400k using FHA or FHA 203k financing.

Scenario 2: You are approved for 270k using FHA financing with a $6000 grant from IHDA(Illinois Housing Development Authority) that is forgiven over a 10 year period and does not have to be repaid if the holding period requirements are met. But if $6000 grant is accepted you CANT do 203k financing.

I'm aware that buying and renovating will give me the best chance at having equity in the property. But I also realize that turning down a $6000 grant that doesn't need to be paid back would not make any sense financially. 

Buying turnkey would require less work, but I may be upside down for the short term, even longer if market has downturn. I may not have an exit strategy for 10-20 years and would have to rely on cash flow. If I have no intention to sell & buy at right price, that's ok and works out I guess. 

I could also attempt to do a 203k loan; buying something distressed in hopes the ARV will be enough for me to refinance while also receiving monthly cash flow. Yes, im aware of all the risk, stress and difficulty of the loan, working with contractors, etc I was for sure going this route until I became aware of the grant option with IDHA.

I think the most logical thing is take the 270k option with $6000 grant and purchase something, not distressed, but in average to good condition. Then over time renovate the units myself with my own money. That way I can get the benefit of buying a property that's ready to rent out, also receive $6000 that doesn't need to be repaid, and force appreciation/increase rent by improving cosmetics of the property.

Chicago market by the way. Turnkey duplexes are around 300k. Might be lucky to find something in average condition for 250k-275k depending on location. Can find something distressed for 50k -100k that may need 100k-200k worth of work with ARVs around 300k...

Interested to hear what YOU would do?

Thanks

Robert

Hi All,

Quick question for people who have owned investment property during 07-09 or other downturns.

How was your property value affected? How much of an estimated percentage did it drop? Do recent property comps still hold value during this time?

For example, an upcoming block/neighborhood where every property is selling for 289k, 295k, 300k, 310k. 6 months from now the market slows up, would these properties on this block still sell for around 289k-310k or will the value drop significantly lower? Estimated percentage?

I’m investing in Chicago btw. Small supply of quality rehabbed properties, but lots of demand. More ppl looking to buy than ppl looking to sell. For those reason, I’m “assuming” the nicer upgraded properties won’t lose much value, but please correct me if I’m wrong. I definitely wouldn’t sell during a downturn so I’m not worried, just curious as to how values are affected.

Thanks,

Robert

Yeah that seems like the best option, I just wish it was more to choose from in the market for this college town area. Its more so 2 units, rarely any 4 units. I guess I have to be patient.

Thanks! Ill Keep in touch!

@Josh Sartori Thats awesome! What neighborhood in Chicago? Im from the westide, west suburbs. Grew up in Westchester, IL

Thanks! I would appreciate any advice from you or @James Syed since you guys are very active in this area. Would there be any possible way to get a 6 unit property with little to no money down? I know the max for FHA is 4 units, But I was interested in that 6 unit for sale in Collinsville, IL listed at $245,000. It looks like it could be a profitable investment. I'm not sure of the area though.

Or if either of you know of or come across any 2-4 units that look like quality investments please let me know. Cities relatively close to Edwardsville. (Glen Carbon, Maryville, Collinsville, Alton, Wood River)

Thanks

Robert Clark

@Gregory Emmer Thank You! I will definitely be look into it, and I will remember the name when I move to South Florida! 

@Trevor Fritz Thanks Trevor! Best of luck to you also. 

@Wendell De Guzman Thank you for your advice. I will definitely read and learn more about house hacking. So if I get an owner occupant loan, will I still be able to get FHA in future? I'm trying to figure out how I can finance my much larger purchase in the future, while also financing this first property. If I have any other questions I won't hesitate to contact you.

Hi everyone,

My name is Robert Clark, I'm 22 years old, from Chicago, finance major attending SIUE in Edwardsville, IL (STL area) and I'm ready to jump in the real estate game head first! I have many goals and this is my dream to become a successful real estate investor. I'm here to learn from people who have the same goals and interests as me. Whether your successful, or only a couple steps ahead of me, I'm sure you can still teach me something. Any advice would be highly appreciated.

I plan on buying my first property within the next year. I'm looking at multifamily properties as well as 2 bedroom 2 bathroom condos. I will have the help of my mother for this first purchase. She has a good job, great credit, and home owner so I know I will get approved by many lenders.

My question is regarding an FHA loan. Would it be recommended to put a down payment of 20% for this first purchase? and then when I graduate in 2 years, use the FHA loan to buy my second property without a co-signer. Also my first purchase is in a college town and the prices of the properties I'm looking at range from $40,0000-$100,000(Not to expensive I guess). And for this 2nd property purchase in the future I plan on having a well established career, and spending a lot more($300,000-$625,500) in a bigger city like Miami or Los Angeles. Would it be best to hold off on a FHA loan for this 2nd purchase? Should I get it with my first purchase? Can I get it for both? Any advice would help tremendously. Or maybe someone has a complete different strategy and that's something I'm also willing to hear. Please respond at your earliest convenience.

Thanks

Robert Clark