All Forum Posts by: Sean McKee

@Mike Terry- Good article and reminder that while markets don't repeat themselves they do rhyme. History is are best guide for what the future might provide.

@Eudith Vacio- why do you like the border on near Indiana so much? This still Cook County right? I'm not very familiar with that area.

@Conte Cuttino- I can't speak for Memphis but a lot of local laws allow for reasonable access during normal business hours. I would post of a notice of entry on door stating the exact date and time you will be entering. Show up at that time, knock and then enter if nobody responds.  If the tenant is there and still refuses entry, then this could be construed as a breach of contract, at least that's how it works where I'm at. You could then proceed to evict. 

It doesn't matter a lot of times if they are month to month with an oral lease. Both the tenant and landlord are still subject to state and local laws.

I don't know how the eviction process works is in Memphis, but in Chicago it's slanted in the favor of the tenant and takes months. I would personally see if you can find a different alternative to get them to comply. It's easier for everyone if there is not a big fight involved.

@Pat Cruz- What documents have you not been able to serve? I had a similar issue. Tenant stopped paying in May of this year. However we were able to serve a 5 day notice in early June and had a court date set for mid July. We were in the process of having a special process server serve them, however they moved out before it got to court. So I agree with @John Warren, that the lawyer might be slow on this. 

Have you offered to pay them to leave? I know it sucks to do that, but in Cook County it's fairly common. I'm not sure how backed up the courts and sheriffs are with other cases, so it might be a few more months before they are out. I've done it a number of times and have only had it rejected once(the case I mentioned above).

You could also report them to the credit bureaus if you have the right information. Evictions are sealed from people's records until August of 2022 I think, so people might not be worried about the repercussions of going to court. However their credit scores are still fair game. So this might cause them to leave on their own if they think it will end up on their record.

Just make sure you talk with an attorney to choose the right strategy for your situation. Hang in there and good luck.

@Jake Fugman, @Jonathan Klemm, @John Warren, @Michael K.- I completely agree. Your criteria and areas of interest had to adapt over the past few years or it would have been hard to find any deals. Little Village wasn't on my radar for years, but then an opportunity to purchase a 4 unit came up. South Shore and Hermosa have definitely peaked my interest as well. I do see a lot of people stretching with some of the multi-family. I've been out bid on some buildings that needed a lot of work and had me wondering what the buyer saw.  2022 will be an interesting year.

@Susan Clark- I have had this happen quite a few times. It's the unfortunate headache of multi-family investing. What I do normally is both email and mail a smoking violation letter. It's sternly worded about the continued consequences of smoking. That usually stops the behavior. Stuff in writing seems to get the point across better than phone calls/texts

If that doesn't work, you should announce a building wide inspection and that anyone caught smoking will be fined(if your lease allows that) and their lease potentially terminated.

If they still aren't cooperating after that, then I'm sorry you have a pretty bad tenant.  You will have to evict them. Smoking can cause a lot of damage. I had a tenant who managed not to get caught smoking in just one of the bedrooms for a few months. It took weeks for the smell to "mostly" go away.

Hello fellow Chicagoland investors!

2021 has been quite the year for real estate. Competition has been fierce for residential property and deals are hard to come by. I'm sure a lot of us got more creative and worked a bit harder to find deals that work. As 2022 approaches, what markets within the Chicagoland area have caught your interest? Where do you see the most opportunity? Have you had to adjust your investment approach?

I know I have started to set my eyes on Northwest Indiana and have found myself considering areas in Chicago that weren't on my radar 5 years ago.

@Ryan Heywood- This is definitely a difficult decision to make. If rents have truly gone up that much for your market, I'd be hesitant to only do a 5 to 10% increase. If rents shoot up again, you'll find yourself even more under market value. I'd probably go with what your property manager suggested. If not you could find yourself having to do an even more dramatic increase the following year if they decide to stay. This will likely piss them off even more. 

@Evan O'Brien- I'll try generalize some of the steps I take, however each person will have their own unique way of operating.

I take more of a top down approach. Starting with high level factors (i.e. demographics) and the go into the granular (condition of property).

1. General Market Research of City/ Area ( i.e. demographics, population trends, Crime, vacancy, expected rents per unit type, market values/trends, etc)- To ensure you are buying in a solid market 

2. Ensure the immediate area around the property is viable (i.e. no serious crime, not in a bad location, etc. )

3. Ensure property type is appropriate for your market( ensure it's not too small, has bad layout, parking, etc.)

4. Inspect property for all necessary repairs and any potential deal breakers

5. Confirm rents, expenses, ARV of building based on inspection of building

6. Legal review (zoning, title, permits, etc)

Again this is not everything, but some general things to consider. 

The two biggest mistakes I can think of that most beginning investors make are underestimating repair costs and overpaying for a property.

To prevent underestimating repair costs, team up with a good general contractor who can give you an estimate of what it will cost.

To prevent overpaying, really make sure you understand what your ARV is and try not to pay more the 80% of the ARV minus costs.

@Nick Gee- I guess it really depends on how you are evaluating the property. If it's purely for your to live in, then I think it is reasonable to go based on your personal preferences, with the realization the costs to convert will be fairly expensive and might not actually add value to the building. 

If the end goal is an investment property, I would be much more cautious with converting, as you might not get the pay off you want. It really is going to depend on your market ,how common they are, and the condition of the existing system. Where I invest, radiators are pretty common and don't impact rents/value that much. I have a building with radiators and have no problem getting tenants. 

Radiators work quite well in my opinion and unless there's a large payoff, it is better just to leave them.