All Forum Posts by: Ryan Canfield

Oh wow I remember seeing that building last summer before they de-listed after 100 days on the market.  Seems easy to source buildings off market, just pay what the seller originally wanted.  Best of luck to you.

@Zak Marinko hanging my license at Kale has worked out for me.

@Jake Fugman  Hi Jake, did you ever get any property management recommendations for Gage Park?

@Brian Garrett Hi Brian, were you ever able to find this information? 

@Kevin Kim  That's a great plan and a very achievable one.  I've allocated 5% for vacancies since they've all been in areas that will not have extended vacancies.  Depending on the neighborhood and time of year, that number may fluctuate up/down.  I've also started budgeting about 2.5% to use towards leasing fees in the event an apartment gets rented with assistance from a broker.  If I turn my properties over to 3rd party management outside of my brokerage one day, I'd be paying leasing fees so for me best to start preparing for that mentally now and knowing it will be a cost of doing business.

It's a good idea to dial in on owner paid fixed costs as best you can while in attorney review to know what you're responsible for and factor that in.  Garbage/water is a good example.  On my properties I've found this number to be around $65/per apartment per month.

As far as maintenance and capex expenses go, this can vary greatly between property owners.  You can have someone who fixes/replaces things that may not be broken yet, and you have others who won't fix something cause they don't want to spend money.  Depending which side you fall on will depend where your rough percentage of expenses will fall.  When I first started I was following my initial model to a T as far as allocating x to this maintenance and x to capex.  After a while it got daunting and considering I wasn't pulling "cash flow" out to spend after accounting for expenses and financing it all stayed in the same greater bank account, it became pointless.  Right now I'm operating with the idea of, Rent - Mortgage - Monthly Fixed Expenses = Leftover For Future Expenses.  Since my 2016 house hack was ground up construction in 2014 and my current house hack has been renovated in recent years my expenses in the near future should be lower.  I may not spend as much on maintenance and capex right now but in a few years I certainly will as every component has its own life cycle.  This leftover money just accumulates in it's own account and once it grows large enough perhaps I'll pull a little out to use for a future downpayment or whatever else I want.

I hope this helps.

@Michael Brown  I think the best area to house hack in depends on what you want to get out of it.  Do you want to reduce your monthly cost of living?  Do you want to live for nearly $0 per month?  Do you want to get paid to live in the house hack?  Depending on your answer, that may lead you to different areas in Chicago.  

My first house hack in Portage Park drastically reduced my monthly living expenses.  My 2nd house hack in Avondale allowed me to pay about $50/month out of pocket to cover the mortgage.  My 3rd house hack in Garfield Ridge is paying me to house hack.  Every neighborhood I've done this in has had their pros/cons but I haven't regretted any of the decisions.  

Find your answers as to why you want to do this and it should help point you in the direction of which neighborhood is best for you.

@Jonathan Klemm we bought in Garfield Ridge

@A.P. King You definitely need to plan head and talk with your loan officer so they understand your plan and can think 2-3 steps ahead with you. My wife and I just closed on our 2nd house hack in Chicago and have it setup where we each can do 2 more comfortably. We bought our current house hack in 2016 with an FHA mortgage and got lucky that the market appreciated enough to allow us to refinance. Upon refinancing, we put the mortgage only in my name to remove the debt from my wife to allow her purchasing power for the 2nd house hack that is solely in her name. She was able to use home possible 5% down to purchase. We now each have an opportunity to use an FHA in the future for 4 properties.

It's easier to do that obviously if you have a partner/spouse who has the same goals as you and you can spread properties out like that.  Like John mentioned above, as you get older your lifestyle is more likely to change and thus moves you out of house hacking.  Try to get as many as you can as soon as possible!

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $359,000
Sale price: $395,000

Bought this in 2015 as a house hack. Sold in 2017

What made you interested in investing in this type of deal?

Wanted to house hack

How did you find this deal and how did you negotiate it?

Bought on the MLS

How did you finance this deal?

Conventional

How did you add value to the deal?

Market appreciation raised the value

@Mark F. @Matthew Olszak

forgot to add you to my post above