All Forum Posts by: Russ Walk

LOL We don't try to go around people to steal deals. We send out over 100,000 mailers a month. So one of your listings got a letter from us? Im sorry we do a ton of marketing and we do ton of deals here in Chicago area. I am not apologizing that we do a ton of marketing. Good luck with your Business.

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Hey Steve

Belmont cragin, Hermosa, Irving park, Dunning, portage park, Albany park, elmwood park, oak park, jeffeson park, rogers park, humboldt park (some parts you should stay away from), avondale, logan square, are all good appreciating areas where we currently buy in Chicago. I typically try to stay under 250,0000 with purchase and rehab. The only ones that will cash flow are the ones you can make a 3 unit or 4 unit. Typically 2 units in these areas will break even.

Agents we have a lot of them we work with. Message me i can send you their info

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Originally posted by Shanequa J.:

Russ Walk How do you expect the buyer to pay that balloon payment if you don't record the deed? If your buyer tries to refi and the bank sees the date the contract was signed and then you record the deed a few weeks earlier, they might not honor the date on the contract. That would look too fishy and could possibly think yall was doing something illegal.

Nothing illegal about it, I know several lenders that will refinance a unrecorded land contract.

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Originally posted by Stephen Masek:

Originally posted by Russ Walk:

I sold it on a unrecorded land contract...

So what happens if the "buyer" stops paying or decides to refinance? No recording and no UCC-1 => big problems.

You evict them, In my contract it states that. The contract I used and reason for being unrecorded were from a well known real estate attorney who regularly posts articles here on bigger pockets Bill Bronchick.

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Originally posted by Bill Gulley:

Nice story, no verification, this is really starting to smell like a come on to a site, a book and some program! The more said, the more I'm doubting. Go ahead and provide more real info, specifics, but good luck! We will see.....

OK yeah let me get started on that book. What real info you looking for? I just came on here to share my story.

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Originally posted by Stephen Masek:

What happens if the lender calls the loan on that Condo?

Did you file a UCC-1 on the loan to the contract buyer? You may not be able to enforce it if they stop paying.

I sold it on a unrecorded land contract, I still have pay the insurance so it will be very hard for the lender to find out. I also have the a Balloon payment in a few years.

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Originally posted by Mike Hasemann:

I think that 50% rule is a bit overblown in terms of real estate. Yea, you might need to factor in the cost of a roof over its usable life and appliances, etc. But those will be purchased in future dollars when my net income will be even greater with the increase in rents while my loan payments stay the same.

My belief is if I can pickup 25 houses making $350 per month when I first buy them, then I know I'm going to be sitting pretty in 10 years even when the roof's, appliances, etc, come due. Mostly because the net income by then will be around $500 or $600 per month per house which is more than enough to handle the occasional big ticket repair.

The one thing I will say I understand is that I wouldn't want to have to count on my real estate income to replace my job income at a 1 to 1 basis. Real estate income is definitely not predictable enough.

I would want to make at least double my take home before I would even consider quitting a job. Not only because of the reality of the repairs and vacancies that tend to bunch up when they do hit. But, even more importantly, because it would be awfully tough to qualify for loans without my w-2 income.

And what fun would it be if I couldn't keep buying houses? :-)

btw: I'm also in the chicago area - far south suburbs (mostly will and kankakee counties, with some early souther cook county purchases). I'm curious how you've factored in evictions in your model?

Thats one of the key reasons (property taxes being the other) I stopped buying cook county properties. My understanding now is that the evictions can take up to 5 months to get someone out of a unit.

Haven't had one yet but thats a huge risk that I would be very hesitant taking on in cook county. If it happens to you, I'd recommend offering the tenant a big chunk of cash to move out. Saved me several thousand with the one bad tenant I've had to date. Offered them 1k to be out in 3 weeks and they took it. Was a heck of a lot cheaper than paying the attorney 1k and waiting the 5 months.

Hey Mike,

That is exactly what I do , I offer them a chunk a cash to leave. I actually just did that last week.

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Clear Title Amercia, I never used them, buy suposedly they can close nationwide.

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Originally posted by Jon Holdman:

A more realistic estimate of the cash flow is 50% of the rent (not laundry, that's a separate business) then subtract the P&I. In this case, $2850. Less 50% leaves $1425. Less the P&I payment (not piti). That's still really good, but not $1310. Your getting that $1310 in part because you're doing your own PM. But also partly because you're in the honeymoon period. Soon you will have vacancies, tenant damaged, and those major repairs like roofs and boilers.

Again I'll state you've done a great job putting these deals together. If your plan is to live off these rentals, though, you've got to be realistic about what they will cost you. If you assume $1300 a month when over the long term (and once you get big enough to pay for employees or a pm) when you're true cash flow is closer to $500, you'll be over your head when reality kicks you in the ... shin. That's the route to being stuck having to manage a bunch of units yourself to satisfy your investors and keep your head above water.

thanks for raining on my parade Jon. Now I have to work a job 10 more years to retire. Just kidding. You provide great advice thanks.

My cashflow estimate provided did not include whoelsaling and rehabbing. Which I want to get into more involved in since most banks wont lend to me anymore. My goal is to do at least 1 whoelsale deal per month and a few rehabs every year .
I have read thousands of your posts over the years hear on BP, and want to thank you for all the free info you provided. You have helped me out alot.

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Originally posted by Joe Noble:

Hi Russell,

Can you please inform me how you manage to get $1000+ monthly cashflow on a 3 unit? i.e. how you went about finding the deal and the calculations you used to compute your cashflow.

It doesn't have to be exact figures but an example breakdown of the numbers would be really nice. You can pm me if you prefer not to openly discuss numbers. I'd be really interested to hear the technique/strategy you employed.

and by the way, well done... your success has been excellent and inspiring.

Thanks

Hi Joe, sure.

we are looking at properties under 150k with 3-4 units, That are in good conidition and need minimal work. We hire a professional home inspector for each property so we know the repairs needed, and what may be needed in the future. Each unit rents for about 850 to 950. We also have a coin operated laundry mat on 2 of the properties which brings in 100 per month, and garage parking on each building which brings in another 100 per month.

I will use one property as a example.
One property
1st unit brings in 950
2nd unit 950
Garden unit 850
Garage 100
Laundry 100
Total 2950 per month
I take out 10 percent of this number for repairs, vacancies, etc. about 2600 per month estimate. I know some months it will be way more.

debt
Mortgages/taxes/insurance combined is 1,100 per month.
water bill 100 per month
electric bill for common area 80 per month.

Estimated income 1310 per month, since I have partner half of the income is mine.

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All Forum Posts by: Russ Walk

Russ Walk has started 1 posts and replied 22 times.

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Post: How I replaced my jobs income in 2 years investing in real estate.

Post: How I replaced my jobs income in 2 years investing in real estate.