All Forum Posts by: Ron Reed

Welcome and thanks for your service!

Welcome. Good luck on your closing.

I have read several posts of people asking about high crime areas in Chicago. I have also seen several posts of investment property opportunities in areas that I am familiar with and think that only out of state investors would buy these properties. Instead of responding to each of these posts individually I just wanted to offer a suggestion as part of your research. Check the Chicago Police Departments Crime Mapping tool at http://gis.chicagopolice.org/clearmap/startpage.htm#. Or search for City of Chicago Crime Mapping and it should be at the top of the list.

You can enter the address or intersection of any property you might be looking into in the City of Chicago and get an idea of the type of crime and number of occurrences of said crimes. 

The tool will only let you look over a 2 week period but in my opinion, if you have an area that has say, a high number of violent crimes, it might be an area of concern. You can look up any period it just has to be in 2 week increments. So, since crime rates always drop during colder months be sure to search during a summer month like July or August when violent crimes are highest.  

I suggest that under step 3, search parameters section, you enter the maximum distance of 1/2 mile. This will give you 4 city blocks in every direction of the address that you enter. It may be better to even find out the Beat that your address is in and search that entire beat and surrounding beats. If you need help with this just send me a pm and I will help you through it. Just click the word Beat under section 2 and enter the address, it will populate the beat that the address is in. 

Chicago is a great city and I believe there is a lot of REI opportunity here. For full disclosure, I am a newbie to BP and REI therefore, I would never assume to tell you where or where not to invest if it fits your criteria. I am only offering another research tool for the fully informed investor. I have lived in this city for over 40 years and have worked the streets of the southwest and southeast side for 12 years. 

I hope this is helpful. I have learned a lot from the forums and BP community and I want to give whatever I can back.  If you have any further questions about Chicago, crime or even where to eat if your visiting, please feel free to PM me and I will try to answer them or at least send you in the right direction. 

Thanks. Good to know.

So the city will pick up garbage for Multi-family units. I always thought you had to hire a private company like Waste Management. Is there a cut off on the size of building that the city will pick up for?

Originally posted by @Ronan M.:

Ask the seller for copies of the most recent bills for these. 

Thanks for the responses all. I see how this is part of the due diligence process  and that the seller can provide the most accurate numbers. I meant more so during the initial valuation. Let's say for example that you are looking at a RE website, see a property, think it fits the 1% rule, 2% rule, 50% rule or whatever criteria you use for initial evals. You decide to "run the numbers". The BP calculators have inputs for all of these expenses, some are based on percentage and others on actual monetary costs. Are you accounting for things like water/sewer, garbage, electricity for common areas, landscaping, etc, in actual numbers or just using a percentage of rent or are you just adding a certain amount for the incidentals? I hope that question makes sense. I just want to make sure that I'm valuating these properties correctly. No sense in practicing running the numbers if my practice is done incorrectly. Thanks for the help.

Hello All. Thanks for all of the great info that you provide for us newbies and wannabes. I have another question for you that I'm having trouble finding the answers to. Through the forums, videos and education tools on the site I have been able to determine what the expenses are. However, It's difficult to find out what the actual numbers associated with them will be. For example, I understand vacancy, repair, property management etc, are a certain percentage of the monthly rent. But what about things like insurance, garbage, water/sewer, turnover like painting, cleaning, etc? How do you estimate the actual (or close to it) cost of these items? How do you find out how much garbage service is on a SFR or say a 6 unit MF? I have been practicing my analysis of potential properties but I'm not confident in the accuracy of my numbers because I can't find any hard data on these items. Does it just come with experience? Are these numbers drastically different based on location? I think I could probably call a local trash removal service and find out what they charge but what about water? If I call the City of Chicago and ask them what the water bill is for an apartment building by me, I doubt they will give me that info if I'm not the owner. Insurance: How do you shop for/cost analyze insurance? Websites, or local State Farm/Allstate office? How do you find these numbers, once again, if you do not yet own the property? I have searched the forums and the internet for these numbers but I can't seem to find them. Thank you again for the help.

Aqil, I understand your frustration. Like Al said, if you can make your property look like "the house to stay away from" that would help. Unfortunately, this will only help your property. If you can get to know other property owners on the block and get them to do the same thing then maybe you can get the guys off of the block. The City of Chicago's gang problem has seen some drastic changes over the past decade. Their is no longer the gang hierarchy or structure that has been typical in the past, where gangs would operate in an area or "turf". Most of the gangs now are broken into "sets" which can operate block to block. This has had a lot to do with the increase in violent crime in Chicago. As far as your tax dollars are concerned I can tell you that you are in the same boat as most of Chicago's residents. The areas that pay the most in taxes typically have the least amount of police service. The police have to respond to areas with the highest crime and can't base that response on how much the residents pay in taxes. The areas with the lowest taxes are the areas with the lowest property values which means lower income which usually means higher crime. If your property taxes are high then you might be in a nicer area which would explain the lower police response. The Chicago police department's staffing is down thousands of officers compared to just 10 years ago. The city's mismanagement of the pension system and budgetary cuts have stripped the police ranks significantly, lowering coverage and response times. Residents on some blocks in Chicago have set up phone trees. If one of the residents see the dealers on the block, they will call everyone on the phone tree and then everyone on the tree will call 911. However, crimes against people like robbery, assault, domestic disturbance etc will always take priority over drug selling calls so if your area has a high volume of calls for those type of crimes then the phone tree might not work. Stop in to your local district station and talk to the CAPS office. They might have some suggestions or resources that can help you. Good luck.

I guess I could go look it up but could you could you tell me what the REACT program is?

Thank you @Vincent Pace. Unfortunately I now have to work Monday night but please keep me in mind for future events. Thank you Sir.