All Forum Posts by: Sean McKee

Quote from @Paul De Luca:

Quote from @Sean McKee:

Hello Everyone!

The title might be a bit dramatic, but I’m still trying to figure out the East Humboldt park rental market. 

We finished renovations on a 2 bedroom garden unit and have had a it listed for several weeks with only 4 showings!

This is a pretty nice unit in a solid B area and location. I know it’s winter time and stuff moves slower. However I just rented my significantly less nice 1 bedroom apartment in Cicero in like a week.

This is an owner occupied building and admittedly renting it out was not my primary objective when we bought it, so I didn’t pay as close of attention to the rental market.

However I would still appreciate some insights from people familiar with rentals in the area. Does this area really slow down that much in the winter? Do I want to much(I listed some information at the bottom)? Or is there a larger vacancy issue in East Humboldt park? 

-2 bedroom, 1 bath garden unit

- 1525 rent. Tenant pays gas and electric 

- Forced air and central ac

- stainless steel appliances.

-dishwasher/microwave

- on site laundry

- Finishings are pretty updated

Thanks!

 Your rent is in-line with the market based on the comps I reviewed, but most of those comps were rented in August. So seasonality is definitely a factor. Do you have high quality photos?

You may have to discount the rent a bit more if you want to fill it fast.

 Photos is a definite issue. The comments we got were the photos didn’t do it justice. It’s just been so dark lately, but I definitely need to update them.

Hello Everyone!

The title might be a bit dramatic, but I’m still trying to figure out the East Humboldt park rental market. 

We finished renovations on a 2 bedroom garden unit and have had a it listed for several weeks with only 4 showings!

This is a pretty nice unit in a solid B area and location. I know it’s winter time and stuff moves slower. However I just rented my significantly less nice 1 bedroom apartment in Cicero in like a week.

This is an owner occupied building and admittedly renting it out was not my primary objective when we bought it, so I didn’t pay as close of attention to the rental market.

However I would still appreciate some insights from people familiar with rentals in the area. Does this area really slow down that much in the winter? Do I want to much(I listed some information at the bottom)? Or is there a larger vacancy issue in East Humboldt park? 

-2 bedroom, 1 bath garden unit

- 1525 rent. Tenant pays gas and electric 

- Forced air and central ac

- stainless steel appliances.

-dishwasher/microwave

- on site laundry

- Finishings are pretty updated

Thanks!

Quote from @Lau Kubilius:

@Sean McKee

I see you're in IL. How did your first auction go? 

I'm considering tax lien investing as well but will likely focus on counties outside of cook.

Would appreciate your insights!

 I got massacred! Like most people there, we were outbid by two institutional investors. They were bidding down to 1 to 2%.  Most individual that won, were buying vacant lots or commercial properties. They were local and knew what they were doing. The residential properties were very hard to get.

I was in McHenry county, so definitely sticking to even smaller might be best. It was still a good learning experience.I hope you have better luck than me!

Quote from @Chris Seveney:

@Sean McKee

If you buy a tax lien you are not forced to foreclose on it - you have specific parameters to follow and statute of limitations - you can just do nothing and let it expire and walk away

You would lose your investment in that situation

 Awesome thanks! I appreciate the help.

Hello BP!

I’m attending a tax lien auction next Monday. I’m mainly doing this to check it out and to get a blue print going forward. I’m not really looking to make a killing.



However I wanted to make sure I steer clear of certain risk. Specifically I wanted to know about the lien holder’s right to walk away from lien and not foreclosure if they choose? If for some reason the property ends up being worthless, I would prefer not to be forced to own it.

Thanks for any advice!

Quote from @Carlos Quiros:

Quote from @Sean McKee:

Quote from @Carlos Quiros:

Hello all-

I am looking at a few properties, one in particular is fully remodeled, has tenants but after asking questions about the area on a facebook group I am told that gunshots are heard in the area and police are present often.

Is this an area where as an investor one sees opportunity with a unit thats fully renovated and a start to beginning to gentrify an area or an area where you'd rather avoid until more people jump into that ship

Any advice would be helpful & appreciated

Carlos

Carlos talk to people that either live in the area or invest there. There are gunshots by one of my properties and gang activity. I have no issues (knock on wood) finding qualified tenants(not gang bangers). There’s less than a 2% vacancy rate. The tenant base can be harder on the units, but that can be factored in.

There are definitely areas that you should not touch. However you have to be able to get the true investment picture and not just opinions from people that don’t actually operate there. You also should determine what your personal tolerance is for any particular market. 

 Where are you investing in? What city is this?

I’m in Chicago.

Quote from @Carlos Quiros:

Hello all-

I am looking at a few properties, one in particular is fully remodeled, has tenants but after asking questions about the area on a facebook group I am told that gunshots are heard in the area and police are present often.

Is this an area where as an investor one sees opportunity with a unit thats fully renovated and a start to beginning to gentrify an area or an area where you'd rather avoid until more people jump into that ship

Any advice would be helpful & appreciated

Carlos

Carlos talk to people that either live in the area or invest there. There are gunshots by one of my properties and gang activity. I have no issues (knock on wood) finding qualified tenants(not gang bangers). There’s less than a 2% vacancy rate. The tenant base can be harder on the units, but that can be factored in.

There are definitely areas that you should not touch. However you have to be able to get the true investment picture and not just opinions from people that don’t actually operate there. You also should determine what your personal tolerance is for any particular market. 

Quote from @CJ Moulton:

Hello BP Fam,

What are the best ways to conduct meaningful research online on various areas you intend on investing in?

Obviously, you could "look it up", but I wanted to post this question to see if there are any specific websites or tools to use that would maybe beat just looking up an area.

Any insight is greatly appreciated, much love!

I like to use Census data to gain a Birds Eye view and then to start narrowing it down from there.

There are plenty of online sites that discuss population data, growth, etc. Worldpopulation review is good. For crime city protect is ok. I also like Redfin data for some of the housing information.

For getting a more granular view I like to put out feelers for data. Posting on BP, Craigslist ads, and speaking with people that live/know the area. This can help you avoid the bad parts of town and get more nuanced data not found in traditional ways.

The first few chapters of the book below did a pretty good job of giving me pointers on how to organize and research the data.

Buy It, Rent It, Profit! (Updated Edition): Make Money as a Landlord in ANY Real Estate Market

Quote from @Catherine Jacoby:

Hi BP community! Newbie here. We are preparing to list our current home for rent and become landlords. This will be our first investment property. I'm a little overwhelmed on where to list and where to screen and the more I read, the more confused I get. I've seen mixed reviews on Zillow Rental Manager. It seems while it's a great place to list, it's not the best for screening. I don't know if the type of property makes a difference in where you list or screen, but it's a large SFH in a desirable suburban neighborhood in the DMV area (Class A property). It will rent for about $4600/month. I have a couple leads already through word of mouth from my local neighborhood FB groups wanting to see it and apply once I list it.

Should I list in multiple places (Zillow, Hot Pads, Realtor, Marketplace) and screen through one screening service? What screening service is best? When you use a screening service outside of Zillow, do you send the screening link directly to the interested applicant if they find it on Zillow? I appreciate any insights and help. Thank you!

I think you should gain as much exposure as reasonably possible. So listing on as many sites as possible is the way to go. Turbo Tenant is pretty good. You can list to multiple sites at once and it’s pretty easy to keep track of leads. I’m sure there are plenty of other sites like it.

For rent signs is another way I bring in tenants. Although this is probably market dependent.

You can keep it simple and use Transunion to screen tenants. You can send them a link. They will pay for it and you will get the results. Just pay attention to local laws as they can be all over the place with what your allowed to screen for.

Quote from @Daniel Netzer:

Has anyone used a "203k FHA construction loan"? I am curious to know how it works and what the rate is relative to the typical FHA-conforming loans.

I just used the Fannie Mae Homestyle Loan. It’s similar. The paperwork is the biggest headache. Nothing is complicated about the process, but it can add a few extra weeks.

With the home style you have the ability to get rid of the mortgage insurance at later date. You choose a contractor and the bank vets them to ensure they are qualified. I went with it because it was more flexible than the FHA 203k loan for my situation.

The key with these types of loans is to give yourself extra time to close, choose the correct contractor a head of time, and to make sure the repairs you are doing will add value so you don’t run into issues with the appraisal. Be prepared for the contractor to “Up charge” for the extra headaches they are going to face and a lot of back and forward with the bank.

I probably won’t do this type of loan again, but it was ok for the specific situation I had.