All Forum Posts by: Ryan Aydelott

At a minimum you'll want to make sure the title is clear, and if someone is willing to offer title insurance, all the better.

Outside of that look for any outstanding violations against the property, are there squatters/tenants onsite, etc. A little harder to dig up is someone that may make a claim against the property but hasn't done so yet. If the property has recent work that you don't see paid invoices on, do your due diligence.

Additionally, if you have major development/reuse/rezoning plans, find a lawyer who works real estate in whatever area you are in and have them connect you with the right people to have the conversations to insure you aren't buying into a battle with the city/township. If you are working with a local bank, they may be able to help with this as well.

With the overheated labor market, good people are hard to find. I have a couple of people I use, but you are looking at around $80/$100 an hour + materials. If you just want someone to learn on your property, I'd recommend Craigslist but who you get will vary dramatically, you'll want to be there to supervise and also know at least enough to know when the job is being done wrong. Ironically if you know that, for most small jobs by the time you are done dealing with a hire, you could have just knocked it out yourself and used the money to buy a nice dinner/bottle of wine.

If you don't want to go the CL route, feel free to PM me. I'm not guaranteeing I'll do one, as I want to protect my guys (and my reputation with them) from crazy jobs or unrealistic property owners. But if you seem reasonable I'm happy to make the intro.

Look on the bright side, if it's illegal it will create a bigger opportunity for you. Thus your challenge becomes figuring out how to do that while avoiding risk in a way that others have not perceived.

Otherwise, I don't believe any laws exist for such a thing in cook that I've heard of. If they did people would quickly structure the relationship and payment to be compliant.

I've seen a number of people try to play by the rules and it's tough, however the way the ordinance is written and how it's enforced are entirely different matters. I've seen operators convert a SFH into a 20+ bedroom airbnb hotel with queen bunk beds sleeping up to 80 people. This involved splitting up rooms, building bedrooms in the kitchen/living room, etc (one review for one of these properties stated that they light from the kitchen coming into his bedroom 'window' was bothersome).

This person apparently got one property address registered with a BACP license #, then copy/pasted that license into all his other slumlordy airBNB's. A simple google search of his license number showed it being used at 3 different addresses. He's still in business over half a year later if that tells you anything about enforcement. 

Bottom line is the city gets $$$ for each booking, so unless neighbors complain or someone tries to be correct about it, they are happy to keep their mouths shut to their voters and their pockets open to the violators. 

Obviously if you are the type to do this, I'd suggest having your backup plans in place and put all the properties into a land trust with a beneficiary operator at arms reach. Talk to an attorney about that one.

I've been in this neighborhood for over 5 years, if you buy a quality building you will get quality tenants. There are tons of professionals that don't want/desire the high rents in the west loop but also don't want to be more then 20 minutes away from work. That said, they won't be happy with your home depot base finish flip either. Your other option of course as Ray suggested is to rent a current unit and take whatever you get to get your foot in the door. There are some of these buildings now that have been inherited, where the owners just want out.

It's a good area with double digit appreciation and most of the easy inventory is bought up. On the gut jobs, I wouldn't go over $100k per unit finished cost for a three flat which means your entry point is about $20k/door. This of course assumes no major structural issues with the building. In the next couple of years you will start seeing new construction here as the flip deals are few/far between and price pressure continues to move people further from the center. 

The city has done the investor no favors with the tax hikes, however they did everyone a solid with the anti-gentrification legislation, how they felt that would fix affordability is laughable but it will ultimately lower density and serve to drive new construction of SFH/Flats faster then letting the deep pocket guys continue to make bets on higher density buildings.

With regards to your comments about 'generations' unless the city and the global economy at large hit the skids, you're talking on a timeline of a decade or two. Doesn't mean you have to sit that long to realize a profit, but at some point your appreciation % will taper off. For me, from five years ago I've already doubled my money not counting rental income using even the worst of comps. The cash flow is too great however thanks to Chicago's high rents for me to even consider selling at a price the 'market' would find reasonable.

If you don't want to full time in the neighborhood, buy a yacht with all your newly found disposable income and spend time on the water during peak idiot season (spring/summer/fall) when the temps are above 50.

I’m looking at launching a project to operate a martime hotel along US coastal cities. I’m looking to take on 2-3 partners that have experience in the hospitality industry and preferably ocean going/nautical experience on vessels up to 300 Tons. 

I myself have a few hundred thousand to invest and most of the deals I’m looking at are around $500k-$1M to get to revenue. 

If you are interested in exploring opportunities/numbers with me, I’d be glad to chat. 

I've found a couple of different common use cases for home sharing. When I would rent an entire house, it was large groups that wanted to have an event/party/gathering, but didn't want to pay the money to do something at a place setup for that. After renting to them, the house/furnishings/etc would have tons of wear, small damage, etc. Yoga retreats that would end up in carpet burned from incense, athletic groups using the house as a food prep/staging area, etc. It's because of groups like those at the lower end of the home rental market, that I would never engage in SFH rentals again at anything less then $1000/night, and even then only with a caretaker/staff onsite in a secondary home on the property.

The luxury property market is different and VRBO serves this better then airBNB, but again you have to price it high enough to get rid of many of your problems. Typically a $5k-$10k security deposit as well. 

On to the individual rooms, I've modeled mine after co-living communities. There is still a caretaker, or for smaller homes a maid/cleaner that shows up every day to stock towels, do dishes, etc. Some things to avoid parties are the usual door locks that record every entry, ring doorbells w\motion etc. (in this manner a red alert is when a property starts tripping motion alarms at the front door every 5 minutes). 

Everyone has access to the kitchen, bathrooms, etc (if it's not a bedroom it's a common area) it's stocked with basics (sugar, coffee, cooking oil, etc), same with bathroom (soap, toilet paper, shampoo, shower gels). Think upscale hostel. This will attract the under 30 traveller crowd, which is really the best market for airBNB anyways, given that the over 30, and especially over 40 crowd tend to be overly critical of homesharing with overall poor 3-4 star reviews (instead of the consistent 5's required to stay relevant on a platform) and in general high maintenance with regards to questions, needs, etc.

I've found when rooming with strangers, they really enjoy meeting others, and more importantly in general 'behave' better as they are in the company of strangers (vs. them being there with just their friends in a SFH/entire condo rental). You will occasionally get bad actors, it's best to head those off and eliminate them as quickly as possible. In one instance I had someone trying to throw a party, I gave her a few hundred bucks cash to get her to take her and her underage drinking friends immediately off the property. Those instances are rare however, maybe 1 in 1000. In general there is maybe 1-2% of people who might be unhappy/grumpy for whatever reason, I also try to remove them as quickly from the situation as well.

The ideal setup for this is 5+ bedroom home, to really get a good mix of people. I'm currently doing 8 of my bedrooms like this, will bump it up to 11 this fall. I'm adding a cafe'/workspace area as part of this as well. In this model there is a full time person on-site, it's run more like a boutique hotel/high end hostel at that scale but it allows for lots of extra little perks you simply can't justify with less rental volume.

If you aren't getting the revenues you are expecting from airBNB, or if you are thinking about listing your property on home sharing market but aren't sure if it's a viable alternative. Talk to me first.

AirBNB has been great for many investors, but most of them are leaving money on the table. Make no mistake, airBNB *is* ecommerce and unless you have experience in this realm, you are going to make a lot of mistake, many of which you aren't even aware of.

I've run online businesses since the early 90's ranging from Internet service providers to e-commerce. Everything from the paint color on the walls, to how you communicate with your guests matters. I split test everything and run things by the numbers to maximize bookings. I have been able to generate eye-popping numbers in terms of booking rates (over 99% occupied!) with previous guests clamoring to get on a 'waiting list' if there is a cancellation.

I'm making 4x the money per door then I would with normal investing. My home share rental income is at a level where I'm recovering the entire purchase of my properties every 2 years. Even with double-digit percentage price appreciations annually for the past five years, I simply can't sell because the money is too good for me with homeshare.

I'd love to scale this out for others as part of my 'race to retirement', if you are interested in having an expert that will help you maximize the revenue out of your properties, reply to this thread with your property address. I'll take a look and if it's something I think I could work some magic, we can talk in private.

So I've airBNB'd entire properties/condos, and I've airBNB'd individual rooms. My experience is that you experience far less property damage, etc. with individual rooms. The airBNB "host guarantee" is a sham, I've tried making a few claims, even when providing receipts for everything they lowball you like cheap car insurance. You can insure with commercial, but it's around $1000-$1500/month for 'real' insurance. In this case, you are better off self-insuring unless you really get a doozy of a guest.

On condos, single family, I've found it like others to be roughly break even with regular tenants, perhaps a good short term option if you had the property listed for sale or something. But there are  a lot of additional overhead expenses that chew up any of the additional revenues. The large groups that rent out condos/whole properties tend to overall be much more work then a couple of travelers. 

Because of this the best model I've found so far is doing single bedrooms. I'm currently generating 4x-5x normal rental returns doing this. Don't think this isn't work, and you have to be savvy about how you design and market the property. I run near 100% occupancy and actually have guests asking to be on a waiting list if another guest cancels.

Part of this is that I've done split testing on everything from shampoos and towels, to paint colors on rooms, not to m mention the ad copy on the listing.  Through this I have been able to extract unbelievable revenues out of a single property. But essentially you are running an e-commerce business. 

I've run a multiple of those businesses before, so these optimization strategies are hard won. After all expenses paid and the operation fully staffed (I simply manage) I'm seeing around 50% net profit, this includes all overhead, maintenance, utilities, insurance, staff, etc. 

If you are a passive investor, this won't be your cup of tea. I've debated on scaling this model, obviously need to be selective about the properties I do this with. Location matters of course, but in different ways then traditional real-estate investing, meaning there are tons of opportunities out there for this that get looked over by the normal folks. 

I'm open to discussion from others if they had an interest in such a venture, I'd never want to go back to 'normal' renters again.

Hello, 

I currently manage/live in my property in East Garfield Park for the past 5 years where I have two buildings, I currently do short term and long term rental management.

I have expertise in old building renovations and maintenance, having owned/rehabbed multiple buildings, some pre-civil war. I also have general labor/staff I use on a regular basis in the area for many tasks.

Feel free to PM me if you are interested in seeing if we can help each other out.