All Forum Posts by: Sarita Scherpereel

Quote from @John Clark:

Quote from @Ropo Sanni:

Hello, I'm new to real estate and I'm looking to purchase my first property in Chicago . I want it to be a multi-unit preferably 3 units. I have about $100k available for down payment, closing costs and I'm hoping to have some left over for reserves. The goal is to make passive income and build generational wealth. I'm hoping to purchase something that is move in ready with little work required to make it more appealing to renters while charging max rent. Currently, the properties that seem to meet that criteria, don't work with the numbers I'm working with. Any advice on how to approach this? I'm looking to re-evaluate my approach. 

Thanks!

 As others have said, forget the North side. It’s an appreciation play, not a cash flow play.


Get on the green line or the orange line and check neighborhoods around each stop. Some place you would like to live is your criteria. I like Brighton park, archer heights, and west Elsdon, but that’s just me.

 Brighton Park is pretty great! 

Hi @Keonte Davis Good for you for getting back out there! A great way to network and meet people in your local community is to attend in person meet ups. Especially getting into wholesaling! You need to know buyers but also investor friendly realtors. They can help you connect to buyers as well. 

BiggerPockets has a section just for this, Under the BUILD YOUR TEAM tab- then select- MEET UP

https://www.biggerpockets.com/forums/521

Best of luck to you!

Hi @Hamidou Keita It might be helpful to be specific about where in the midwest the property is located. In parts of Chicago, not having central air or W/D in unit can still be a good deal and a "turn key" property for that neighborhood. While in other parts of Chicago the market standard to have BOTH! Does your location require those features to meet the expectations of full market rental value? 

Quote from @Greg Scott:

 @Sarita Scherpereel:

Wow. $1M! Are you able to say where this was in the Midwest?

@Joel Bongco

I assume that the situation you described above was a bank owned apartment portfolio(foreclosed)?

This was an Ohio portfolio, around 200 units total.  This was not a distressed sale. Although rents were below market, it was a stabilized asset, fully marketed for sale.  Anyone looking for something that size and in this region would have been aware, and could have toured.  I believe the broker said hey had done about 50 tours. The seller was the original developer that had owned these properties for decades.

There was no underlying flaw or hidden upside that would drive this behavior.  I can only conclude that someone with a lot of cash was getting anxious to deploy their money quickly and was willing to pay well above what the broker (and many buyers) thought it would sell for.

Perhaps it is not such a bad time to sell!

I'm pretty shocked to hear that is happening in Ohio. I'm in the Chicago market and we are seeing a lot of multiple offers, bidding wars and aggressive buying strategies. The highest I've seen the 2-4 multi-family units (this year) was $102k over the listing price. Closing at $1,252,000. This was also an odd deal because this property was so close to the train tracks- it was practically a train car. Not a joke. You could jump from the building to the train tracks. I would never recommend a buyer going up that high to purchase a train car! Even if it's in a great area of the city. It lacked bedroom size and count and needed work! It's also harder to rent so close to the train. Which means my client might not have been able to get market value for these units. Too much risk. 
In Chicago, the commercial and multi family brokers talk about how it's a tax assessment year and we should see prices go down and inventory go up. But I haven't seen it. Nothing but competition and lack of inventory driving prices up. Even on train cars! 

Quote from @Matthew Beninate:

Quote from @Sarita Scherpereel:

Quote from @Seo Hui Han:

You may want to consider local banks / credit unions just because many of them will require or give you more favorable terms for things like HELOC's and other line of credit products if you have a deposit account with them.

 I agree local banks and credit unions will be better if you're planning on growing your portfolio. 

Would this still be recommended if I planned on investing in different markets?

 Local banks. Even if you start to invest out of the area you live in. 

Quote from @Joseph R.:

Thank you, I have attended a couple REIA meetings in the area. I used the meetup app on the play store to find out about that. I'm very very green to say the least. I'm just exploring, gaining knowledge and conducting research before I pull the trigger on anything.

 It's a really great place to get started! 

Wow. $1M! Are you able to say where this was in the Midwest?

Great work :)

@Rodrigo Garcia Welcome to the community. We are glad you're here. Thank you for your service. VA loans are incredible. If you have any VA benefits left (definitely check into that) I would try to use them and maximize that benefit.

A great way to network and meet people in your local community is to attend in person meet ups. BiggerPockets has a section just for this, Under the BUILD YOUR TEAM tab- then select- MEET UP

https://www.biggerpockets.com/forums/521

Best of luck to you!

Hi @Herminia Ojeda Great question! I agree with what has been said on here so far. Whenever I had a client facing this issue. We start to see properties in person. That why the numbers are less inflated and based on what the building/project will really require. I'm in the Chicago market. We have a lot of 120 year old buildings. My 3 flat was built in 1894. The CapEx estimates can be very difficult to estimate without seeing the building. And often times buyers can find a property that has had a lot of the more expensive projects done. That has to be adjusted in the numbers.

Yes, interest rates are really high and that is going to effect a lot of markets. But what is the ARV in these areas? Is it a place(s) that is worth that has fast appreciation? What do the numbers look like after a refinance? And is the vacancy rate accurate for your market? These are common things I see buyers overlook when analyzing. Best of luck!