All Forum Posts by: Stephen DeFalco

@Jonathan Klemm - yes we use the Chicago Association of Realtors lease too. It has a lot about evictions but nothing on the other end. 

Closure! We talked to the tenant and offered to help them market the unit for a sublease and in less than two weeks are securing the paperwork for a one year sub with no gap in rent payments. 

Also, especially in Near North, everyone we've had apply for the place loves that we are upfront/transparent and include parking and storage in our rental price since so many developers and larger buildings near us market the unit at one price and then when they find out it's another $300+/month for parking it's out of their budget. 

@Paul De Luca and/or @Jonathan Klemm - would you be willing to share your Chicago-specific lease agreements or what language you use in your leases for the early termination so we can incorporate that into our future leases?

Thanks so much everyone!

@Mike Dymski correct. Unless the 1-year leaser re-up's their lease (which has been the norm for us at least for a second year) with an annual turnover we wouldn't be making anything significant on the property which is why we prefer 18 month or 2-year leases. We have been fortunate to have a few tenants re-up their 1-year leases multiple times so have only have the dreaded 3-4 month vacancy twice the whole time renting it but it's always a possibility.  

Thanks for all the feedback thus far.

One piece of information that impacts a lot of this - this is a condo in a larger building and the HOA doesn't allow leases under 1 year including MTM so we can't implement that strategy but keeping leases to a year makes sense. The other issue, especially in instances like this, is there's a rental cap/% of building rent at one time so when we loose a tenant we get put on a waiting list to be able to rent again which is on average 3 months of vacancy in-between each lease so it's not loosing a couple weeks of rent.

We'll move forward trying to help her get a sublease and make sure we put a termination clause in our next lease.  

Thanks again

Hello Fellow Landlords,

I have a tenant who had a one year lease ('23-'24) with us and was great. This past spring she re-signed for a 2 year lease with us (4/1/2024-3/31/2026). She informed us a few weeks ago that she got another job that is forcing her to move (still in Chicago-metro area) and she'd be moving out in September. In turn, that would be the last month she'd be paying rent. We explained to her she could find someone to sub-lease with our approval but one way or another she was on the hook for rental payments through the end of her lease and she seemed unaffected by potential legal action if a suitable sublease was not found.

Anyone have any advice on this situation?  

Thanks 

Thanks @Ryan Thomson and @Will Barnard - time to hit the pavement. 

I'm in the Chicagoland area looking at acquiring a second rental property (currently own condo I'm renting and looking to grow my portfolio) and at first was looking at SFH's since I don't have a ton of capitol for a down payment but after working the rental reports the CoC ROI's just weren't there so pivoted to looking at multi-family properties. Found a great building with a 10% CoC ROI but since I'm not house hacking this property (live in a SFH with my family) I'd have to go through the conventional loan route and I don't have the liquid capitol for a conventional 25% down loan without a partner.

Any advice on how to find and approach possible partners with a deal like this?

Thanks,

Stephen  

@John Warren @Joe Archbold- Currently living in my forever home (not looking to house hack) in the SW suburbs near Midway. Have family throughout DuPage and was thinking out there or central-western Cook thinking there's probably families trying to get into good school districts and not a lot of SFH rentals in areas like Wheaton/Naperville/Downers Grove but am finding the cashflow doesn't make sense for 90% of the deals I analyze. Our condo is in near north Chicago so not really worried about having properties right in my backyard. Just focusing finding good opportunities to expand our portfolio. I've heard Cicero/Berwyn from a couple people now - may start investigating that area

@Jonathan Klemm - Can you explain the "light" idea? My goal/timeline is I'd like to have 4 more deals under my belt by 2030. I believe if I can achieve that I can be on my way to FIRE. My main fear is expanding too quickly and if I have a vacancy or something unexpected with one of the properties I don't want to be sitting on multiple mortgages I can't pay.

I'm curious what people think is the best type of 'buy and hold' property to look at for beginners (condo, single family home, multifamily, other). Living in the Chicagoland area, multifamily units in Chicago proper are an investor's go-to but I don't necessarily want to deal with Chicago/Cook taxes and duplex/multifamily building stock is dramatically lower in the suburbs so might go single family home in DuPage or Will. Any advice/thoughts would be appreciated. Thanks 

Investment Info:

Condo buy & hold investment in Chicago.

Purchase price: $150,000

My wife and I bought a condo back in 2012 and had some great years in it. We moved out to the Chicago suburbs for work and to have room to start a family and held onto it as an investment property. 1 bed, 1 bath 'soft loft' in the heart of River North with parking, storage, and good building amenities.

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

At the time location was everything to us and condo living was preferred in our early 20's. This was our primary residence for 6 years and when we wanted to upgrade to a house we decided to hold onto it.

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

Traditional house hunting with an agent.

How did you finance this deal?

Conventional 30 year loan

How did you add value to the deal?

Upgraded kitchen appliances after we moved out. Going to update bathroom and cabinets in the coming years.

Lessons learned? Challenges?

Turnover has been a challenge. We've had three tenants in three years and usually about a two month vacancy in-between tenants so any profits we make in the year go into holding costs in-between tenants but it's essentially paying for itself and are almost finished paying off the mortgage so expect larger returns in 5+ years.