All Forum Posts by: Rj D.

Hey @Edward Pang, I house hack in Bronzeville and love it. I also have a 6 unit in Washington Park with 3 section 8 tenants. So far everything has worked out very well! I'm also a broker and have put some friends into great homes with section 8 tenants. As long as you have the right tenant and can handle the necessary paperwork and hoops you have to jump through for section 8 you will be just fine.

My finance and I currently manage our own properties and it so far so good. As long as you are putting yourself in a good situation from the beginning, there are less obstacles on the back end. What I mean by that is buying right, vetting your tenants correctly, not ignoring repairs and/or initial capital expenditures, and setting up correct systems and boundaries with your tenants.

Good luck!

Wish you the best of luck but I would watch your statements about ALL 2/1's being above $1,200 and non rehabbed. I ran a rental CMA and MOST of the units above $1,200 rent have in-unit W/D, Central Air and Forced heat, SS appliances or at least a combination of these items. There are many rents below $1k and anything above that threshold has been rehabbed to some extent.

Henry, you know who I am, you know I'm a broker, and anyone worth their salt is going to do their own due diligence. You're throwing wild numbers out there and the market simply does not support your statements.

Also, the "tester" of the market isn't worth its salt. Let's talk about the close rate for finding good tenants. How many tenants that reply to that add will actually fill out a credit application? After that how many will you actually qualify as being a good renter? If you're not a slum lord you are vetting your tenant thoroughly and just because you got x reply in whatever amount of time DOES NOT mean you will get a quality renter with no problem. 

Here is a scenario - out of 30 replies - 7 set up walkthroughs - 3 actually showed up - 2 filled out the credit reports/rental applications - 0 were qualified.  I hope you are educating your clients and not selling them.

In case anyone wants to do their own due diligence...

https://www.redfin.com/IL/Chicago/6427-N-Hermitage-Ave-60626/home/13569159

@Henry Lazerow I see you sold 6427 N hermitage which closed at $425,000 in AS IS condition and I am guessing you received $12,500 in credits?

The public information rent roll shows the building's rents were $1,814.00 with one owner-occupied unit. How is that anywhere close to the 1% model? Also its a fully electric building... No central air with ELECTRIC furnaces.... tell me how this is a 1% property with only cosmetic upgrades?

I see you sold 6427 N hermitage which closed at $425,000 in AS IS condition and I am guessing you received $12,500 in credits?

The public information rent roll shows the building's rents were $1,814.00 with one owner-occupied unit. How is that anywhere close to the 1% model? Also its a fully electric building... No central air with ELECTRIC furnaces.... tell me how this is a 1% property with only cosmetic upgrades?

@Jeff Burdick, @Robert Regis's original post asked particularly for the "best" neighborhoods to invest in. Assuming that Robert is a new investor, can we also reasonably assume that he doesnt have the capital , experience, connections, or track record to compete in certain markets? I would say so...

Now, let's take the markets that @Henry Lazerow mentioned. Please provide me with easily obtainable, light rehab, easy value add properties that would cash flow immediately, or even be a halfway decent investment to make these markets reasonable for a new investor to "find deals" in.

I'll be waiting.

Thanks

@Jason Marcordes hit it on the head. The south and west neighborhoods are still providing deals but they are getting harder and harder to come by. Nearly all the properties on the MLS are asking too much and the problem is people are still buying! Most deals that have some faith of cash flow require HEAVY rehab. The problem is the properties have also reached a peak in appreciation.

You have to be very savvy, stick to your underwriting, and have construction knowledge to be successful at this point in time. The days of 2010 and stumbling into cash flowing deals are over which is why experienced investors are buying less. Its a long term play, don't get frustrated, and don't buy a bad deal because you can't find anything else. Be patient, network hard, increase your education, and find off-market opportunities.

@Henry Lazerow I would disagree. You essentially created a list of already gentrified and mature markets. The chances of finding deals in those areas are SLIM and nearly impossible without having to do a HEAVY rehab.

Thanks @Jonathan Klemm, we'll see you at the next one! @Eric Pitt,

@Sebastien Beauboeuf the removal of kitchens/baths is dependant on how the work was completed in the first place. If it was an illegal conversion or work done without obtaining the correct permits they WILL most likely need to be removed. Here is a link to the city regarding Illegal conversions as well as "deconversion" permits. 

https://www.chicago.gov/city/en/depts/bldgs/supp_info/illegal-conversions0.html

Not much info but if you dig... the city will provide all the legal information you need and its FREE. 

We can talk a bit about the implications of an "illegal" unit on Monday. 

and hey @Brie Schmidt :-)