All Forum Posts by: Scott Anderson

Quote from @Jonathan Klemm:

Hi @Scott Anderson - Where is Rantoul, Illinois lol I looked it up but had no idea where it was.

What was your original intention of purchasing it from the auction?  Do you have an idea what the current value is "as-is"?  If you could develop it as self-storage that seems like a pretty solid play...how many other facilities are in the area?

Either way, I would engage a couple of commercial brokers in the area to get their opinion on the highest and best use.

Being in Chicago I don't have many resources down in that area.  Sorry!

Rantoul is about an hour and a half south of Chicago. My intention was to sell it after buying it, i placed a low bid not thinking I would actually win the property. I found a good local agent and he thinks its valued around the $150k range based on what other similar properties have gone for in similar condition.

I did a title search prior to the auction and the only lien is a $11,000 sewer drainage fee from the city. I am also familiar with searching for EPA violations and the search came up clear for any EPA issues.

Hey Greg, the building was purchased sight unseen. I have no information about the previous owner and there was no environmental preformed on the property. at the auction you are only given the parcel number. I did in fact take title in my personal name with no help from an attorney. 

I attend auctions and took a chance on a very unique property. I paid $10,000 for a 55,000 SQFT abandoned military cafeteria and post office sitting on 4.2 acres in Rantoul Illinois. I do not have experience with anything this large or the industrial asset class. The building in in rough shape, the roof is leaking, windows are broken, and the inside has been vandalized with graffiti. I also see a lot of potential for it as a warehouse because of its proximity to an interstate and being 1.5 hours from Chicago. There was an other abandoned building on the base listed for $19 a SQFT.

Trying to figure out the best option; list with a broker, try and find a tenant to lease it as-is, partner with someone with experience or market it myself (I have had bad experiences with agents and have a background in sales so I avoid using agents whenever possible)

Investment Info:

Other other investment in Lewistown.

Purchase price: $826
Cash invested: $1,056
Sale price: $10,000

Flipped a piece of land purchased from a county auction. Purchased for $826 and seller financed for $10,000 to a buyer.

Investment Info:

Other wholesale investment in Lewistown.

Purchase price: $826
Cash invested: $1,056
Sale price: $10,000

Flipped a piece of land purchased from a county auction. Purchased for $826 and seller financed for $10,000 to a buyer.

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

The high ROI of the deal and low entry cost.

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

County tax deed sale.

How did you finance this deal?

Cash

How did you add value to the deal?

Allowed buyer to pay using seller financing of $150 per month for 5.5 years.

What was the outcome?

turned around 1k in cash into $150 a month in cashflow for over 5 years.

Lessons learned? Challenges?

dealing with local counties can be very slow. It took 4 months for the county to record the deed of the property.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Title company.

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $32,500
Cash invested: $13,000
Sale price: $73,000

SFH fix and flip. Purchased with 100% bank financing and put $13,000 into the rehab and carrying costs. split 25% of the profit with my contractor. Purchased for $32,501 and sod for $73,000.

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

Quit my day job and needed a new source of cashflow. Now I am a full time in real estate.

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

The deal was part of an estate sale.

How did you finance this deal?

Received bank financing for 100% of the purchase price.

How did you add value to the deal?

Did a complete remodel of the house. Painted all the rooms, remodeled the kitchen and bathroom, and updated the property to a modern farmhouse style.

What was the outcome?

Sold for a profit.

Lessons learned? Challenges?

The flip took a lot longer than I expected. I failed to set time periods for the remodel of the house. Instead of a profit share with the contractor I will do a contract based on the time of completion. Perhaps offer an incentive for finishing early and a consequence for going over timeline.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

My agent was Samantha Braden from Rhodes Real Estate. I would recommend her to any investor looking for an agent in the central IL market.

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $32,500
Cash invested: $13,000
Sale price: $73,000

SFH fix and flip. Purchased with 100% bank financing and put $13,000 into the rehab and carrying costs. split 25% of the profit with my contractor. Purchased for $32,501 and sod for $73,000.

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

Quite my day job and needed a new source of cashflow. Now I am a full time in real estate.

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

The deal was part of an estate sale.

How did you finance this deal?

Received bank financing for 100% of the purchase price.

How did you add value to the deal?

Did a complete remodel of the house. Painted all the rooms, remodeled the kitchen and bathroom, and updated the property to a modern farmhouse style.

What was the outcome?

Sold for a profit.

Lessons learned? Challenges?

The flip took a lot longer than I expected. I failed to set time periods for the remodel of the house. Instead of a profit share with the contractor I will do a contract based on the time of completion. Perhaps offer an incentive for finishing early and a consequence for going over timeline.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

My agent was Samantha Braden from Rhodes Real Estate. I would recommend her to any investor looking for an agent in the central IL market.

Thank you Carl Fischer, Bernard Reisz, and Bill Hampton for the advice! 

I agree that getting the right foundation on your tax strategies will pay off in the long run. I will be reaching out so I can have someone to assist my for this tax season. 

Last year I began investing in real estate and will need to file taxes for 2019. I have an LLC with 2 single family homes that were both purchased in 2019 and used as buy-and-hold rental properties. Since this will be my first time filing taxes for my LLC I wanted to get advice on whether I should go through a tax advisor/accountant or if it best to file the taxes myself with TurboTax or other tax software.

Does anyone have a tax professional that they recommend I contact?