All Forum Posts by: Matt Souza

Hey BP! I'm currently putting a team together in the Metro Detroit area to buy, renovate, and rent out SFHs (BRRR strategy). Are there any wholesalers just outside the city that specialize in selling homes in the $10-30k range? Specifically looking at the Ferndale, Oak Park, Hazel Park, Southfield, and Madison Heights areas. PM me for more info! Thanks

Bo Edmond Hey Bo, I am currently gearing up for buy and hold work in the Detroit area. PM me and we can talk more about the best areas to buy. Maybe I can also help with some boots on the ground. Matt

@Thomas Franklin Thank you for your feedback, it is greatly appreciated. FHA 203k loans may not be very popular in Miami, but they are here in Chicago. I think both the lenders and the selling agents are familiar with the process, so that helps. As for purchasing through an LLC, I am also not too concerned about that at the moment. Since I am so young with few assets, there is very little motivation for a lawyer to come after me in the event of a "slip and fall." Lastly, doing business as an individual has all the same tax benefits of doing on as an LLC, to the best of my knowledge.

@Nick Patterson Correct, I do plan on living in the property, a "house hack" if you will. Thanks for the great advice regarding to switching to an LLC later on, that makes a lot of sense. I will keep plugging away at the MLS!

Hello BP,

My name is Matt and I am a young professional living in Chicago. I came across BP about three months ago, and have since become fascinated with REI. My current goal is to purchase a 3-4 unit property that needs some work with an FHA 203k loan, specifically in the Logan Square, Humboldt Park, and Avondale areas. I currently have my buying team in place and have made several offers over the past month, but the market is extremely competitive right now.

Does anyone have advice for finding deals in these areas? I am going to keep pursuing the MLS angle like I have for the past two months, but was wondering if anyone has had success with other means. It seems that there are a lot of cash buyers out there making high-ball offers that do not make monetary sense.

Any advice would be greatly appreciated!

Matt

The short answer, do not rent out an illegal unit. You are opening yourself to countless legal risks, and will have virtually no recourse if that tenant ever has issues. For instance, how do you legally evict a tenant out of an illegal unit? They could potentially stay there forever. Now if you want live in the illegal unit and rent out the other two, I have heard a lot if success with that. I have also heard of investors using that unit as laundry and storage for the other units, so you can still get some cash flow out of it. The last option is to have a city inspector come in and rezone the building into 3 units. This can be a tedious process, however, and opens your property up to a slew of potential violations. Hope this helps!

Hi David,

I am currently in the process of putting offers on some 3-4 unit properties in the Chicago area using FHA financing and have some of my team in place. Feel free to reach out to me directly and I will share whatever knowledge and contacts I have. Good luck!

@Brie Schmidt Would it be possible for you to send me some of those examples of properties in the Chicago area? I would really like to see your numbers. Thanks!

Matt S.