All Forum Posts by: Tom Casey

@Danny Chan It's very important to establish boundaries and standards for your tenants. I would recommend being very clear on how much their income/rent ratio must be in order to rent from you. Discriminating based on amount of income is VERY different from discriminating based on source of income. Never discriminate based on source of income, as that would be illegal in Illinois as well as many other states.

However, discriminating based on how much someone makes is not illegal. Actually, it is very important for establishing a solid business as a landlord. If you don't set those criteria, you will end up with tenants who cannot pay their rent and you will have to deal with all kinds of issues down the road! Save yourself and your future tenants these problems and make it very clear how much they need to make in order to rent from you. Write it everywhere that is appropriate and even tell them before they fill out an application! You would be doing yourself and future tenants a disservice to rent a property to them that they cannot afford. 

Whoever says not to make that clear is incorrect!

@Jamie Mcdermott Awesome! Make sure to take a look at that FB group I posted in the prior comment. Also, keep your eye out for any posts from @Julian A Beeks on when it will be! 

It really did feel great to get out there and connect with other like-minded real estate people. Can't wait for the next one.

Hey @Michael Johnson!

I am just finishing up a rehab for my first property up in Roger's Park! We should definitely connect.

I agree with @A Morgan. Joe Asamoah is such an amazingly informative person when it comes to Section 8 rental investing. He appears on the BiggerPockets podcast show 356. 

One of the many cool tidbits that I learned from that episode is that you can check the rental payment amounts by zip code on the HUD User website https://www.huduser.gov/portal...

Here is the list for rent amounts by zip code for Cook County: https://www.huduser.gov/portal...

Here's the rent payments for the two Roger's Park zip codes:

                         Efficiency           1-bed                  2-bed                 3-bed                 4-bed

I look forward to hearing about your progress moving forward!

Best,

Tom Casey | Real Estate Agent

East Lincoln Park & Gold Coast Office

@properties

My wife and I are in! Thanks!

Hey @Ross Carlson, I am in the midst of finishing up the rehab for my first property which is a condo unit on Chicago's north side, Roger's Park neighborhood. From what I've seen, it is super tough right now to find any properties (including condos) with which the numbers make sense for cashflow/CoC return. You're going to be especially hard-pressed to find any that are also close to move-in ready.

However, I think it is still quite possible depending how much work and/or money you're willing to put into fixing a place up. We did a gut rehab on our current place and we would definitely cashflow if we decided to rent it out, but we are going to sell it instead and try to leverage that money into a multi-unit. 

I think it's great that you're working with an experienced builder. If you really want buy and holds in the Chicagoland area, I'd pick his brain and bring him in on some rehab projects. You don't necessarily have to flip them once you fix them up. There is still a lot of room for cashflow as long as you get a pretty rundown property and make it nice. I'm sure he could help you out with that process.

Anyway, feel free to reach out anytime! I'm new to the real estate game as well and always looking to network.

Best,

Tom

@Daniel Meyer I am not a landlord yet, but Brandon lists some really good ones in his book. I'm listening to it on Audible now and almost done with it. I'd say that most or all of your questions should be answered in the book and I don't think I'd do it justice trying to paraphrase. It's called The Book on Managing Rental Properties by Brandon Turner. Hope it helps my friend!

Hey @Michael Fortier!

Welcome to Chicago! I would recommend @Paul De Luca as an experienced agent with house hacks in the Chicagoland area. I've heard great things about @Michael J Scanlon as well! I'm thinking you can't really go wrong with either of these guys as agents for a house hack.

I am new to REI as well and would love to connect and talk real estate anytime!

Best of luck to you! I'm looking forward to seeing your progress as a new investor here in the Windy City.

Kind regards,

Tom Casey | Real Estate Agent

East Lincoln Park & Gold Coast Office

@properties

She sounds like an awful tenant! I'm sure you can't wait to kick her out after the lease expires. I've been reading Brandon Turner's book on managing rental properties and it makes it very clear that screening tenants well is likely the most important thing that you'll do as a landlord. Something that I think is super helpful that's included with the book is a bunch of documents that Brandon and others use for landlording. You can get the PDFs here: https://www.biggerpockets.com/...

As far as the maintenance, you should make it clear in the lease that if damage or wear and tear is determined to be due to misuse or overuse that it is the tenant's responsibility to pay for maintenance and/or replacement of hardware/fixtures. Obviously, for this tenant you have to go off the old lease which is likely inadequate. But I think that if you check out those documents included with that book and also give it a read if you haven't already, it should give you some good tools for dealing with these kind of tenants in the future.

Good luck with everything!

Tom Casey | Real Estate Agent

East Lincoln Park & Gold Coast Office

@properties

@Nicholas Fiore Those are super solid numbers man! Hopefully the association lets you get rented soon!

@Nicholas Fiore It's funny, I am just starting out as well and I am in a very similar situation. Closed on our first condo in June of last year for $155k (2bd 2 ba in Rogers Park) and ever since, we I have been going back and forth on whether we should do the cash-out or just sell and move on. In researching comps, I'm seeing similar places sell for 225-250k. I have personally come to the conclusion to sell and move on to the next investment.

However, your situation sounds different than mine in a few ways. Most importantly, East Lakeview is an absolute prime location for a rental! Rents are significantly higher there than they are in most neighborhoods throughout Chicago and surrounding suburbs. You shouldn't have much problem at all with turnover/vacancy in that area as there will always be high demand from tenants. I'm assuming it's a 1bd 1 ba, which would mean anywhere from around $1250 to $1800 depending on condition, layout, etc... I would be curious to know how much you think you could charge for rent and what kind of cashflow that would bring after PITI and other related expenses. As long as the HOA payment isn't crazy, I would think that the rent at that rate could bring you a couple hundred bucks of income every month.

Another advantage of your current situation is that it sounds like you did not over-leverage and spend too much of your money or go into significant debt. In my situation, I went way over budget on the rehab project and took on bad debt to complete it. However, it sounds like you are in a sound financial position with minimal debt, which would mean that you wouldn't need to use that $50k from the cash-out refi for anything other than investing in more properties! This is especially true if you can secure an FHA loan for that beautiful 3.5% down. I would just say, keep in mind the maximum limits for FHA loans in Cook County ($379,500 for Single Family, $485,800 for Two-Unit, $587,250 for Three-Unit, and $729,800 for Four-Unit)

Side-note: Have you heard of the FHA 203K construction loan? I've been looking into it and it is super advantageous especially for new investors who are looking to spend the least they possibly can out-of-pocket.

Anyway, overall I agree with @Zack Karp that you can have the best of both worlds! I think in the future you will not regret holding on to this property. One of the regrets I've heard quite a few times from investors on the podcast is that they wish that they held on to every single property they ever bought! Either way I think you're off to a great start with this unit and I'm looking forward to hearing how things go for you with it!

Feel free to reach out if you have any questions or want to chat more about real estate. Would love to connect!

Best,

Tom Casey | Real Estate Agent

East Lincoln Park & Gold Coast Office

@properties