All Forum Posts by: Tom O.

Quote from @Lucien Perreault:

Quote from @Nicole Heasley Beitenman:

Quote from @Lucien Perreault:

Good evening BP,

Is this a time to buy? Is this a time to sell? Or are we just holding on for dear life?

If you find a good deal, it's time to buy. If you have an asset that's not performing great and can redeploy that capital into a more profitable venture, it's time to sell. 

That is good sound logic. I'm buying a great deal right now and my other asset is performing quite well so no selling unless the "right" price is offered.

 Where are you buying if you don't mind my asking? 

Free drinks? You got me. 

Do NOT take a security deposit. When a tenant is being evicted and seeks an attorney the attorney asks only one dispositive question: "did your landlord require a security deposit?" If the answer is yes, the attorney takes the case. If the answer is no, the tenant is told the lawyer cannot help them. 

Quote from @John Hu:

this right here is the gem advice.  This was Ukrainian village, wicker, Humboldt park (this one I never understood since it’s not near a train), west loop, university village, little village, and Pilsen.  

Gentrification starts with racism.  Call it nicely it’s market inefficiency but recognize that Chicago historically is a very segregated city.  It was only within the last 30 years has the upper middle class incomes start to spread out of the lake.  

Gentrification follows the formula of cheap rent+ east commute to downtown + open vacant space for restaurants and bars + proximity to another gentrified neighborhood that is getting to expensive so people expand their search to surrounding.   Thats the wicker, buck town, logan , and now Avondale expansion.  

There are some area I don’t think will ever gentrify even in the north side.   Like Albany park.  It just lacks the opportunity for commute and restaurant scene.  Chicago has no east west train line that it really needs, It’s already too expensive for anyone to invest, but not expensive enough to really build out.  It’s just going to slowing increase with inflation.  The closer to get to i94 the more valuable it’ll be, but it won’t go crazy like Logan or Avondale.  

The south side is great opportunity, but growing up in the south side I can tell you That anything south of 31st is gonna be for a long hauler.  The reality is there’s too much space to fill up as part of the gentrification. The density isn’t there and won’t get there for a long while.  Chicago need another million people in population to force us to push south.   You can see Bridgeport is just building in old industrial space. Pilsen is filling in and replacing buildings north of cermak.  But there’s still quite a bit of open availability that needs to fill in before expansion occurs.  

I like your post and you obviously know Chicago but a lot of what you are saying is just plain wrong. First, Albany Park is at the end of the Brown Line. Very nice. My buddy's 3-flat just sold for $100K more than what he paid for it a year earlier. You can walk to the end of the brown line from the building. 

South of 31st is in for the long haul? Have you seen McKinley Park? Brighton Park? Archer Heights? Have you seen what's happening around Midway? It's starting to look like Schaumburg. 

All that said I like Little Village a lot. It has come up quite a bit, still is a bit dangerous but appears to have plenty of room for improvement and appreciation. I always say: follow the El lines and it's along the Pink Line and the next west neighborhood from Pilsen.  

Hard to tell how long an eviction will take these days in Cook County. This guy writes a blog and seems to know what he's doing in that world: 
https://www.chicagoeviction.co...

The problem is they've set up the system deliberately to have this huge bottleneck. The system used to send cases to one of 5 rooms. Now, only one. Then out to mediation. Then back to the same room. Just getting an entered order takes weeks. Some attorneys told me they never get them. 

All that said, I might do it if it was a good enough deal. 

One tactic I'd try: you sue the tenants civilly for damages for breach of contract. Not for possession. Does work with some tenants. Make sure you know where they work so you can dock their wages. 

Where in that area did you find a duplex for 155K ? Milwaukee? 

Section 8 rents are contained in the Fair Market Rent schedule published by HUD. Google Fair Market rent and you can look up any zipcode in Chicago or anywhere else. I think North Lawndale offers opportunities but there's issues in the neighborhood. I do think gentrification tends to flow alone the El lines. Areas near the Pink Line will probably gentrify faster than areas farther away. Gentrification is well underway in South Lawndale which suggests the further south you go in North Lawndale the closer you are to the El Line the better.

Quote from @Kim Meredith Hampton:

@Toben B. personally I would not sell right now unless you have an asset of some kind that you want to 1031 your proceeds or are retiring and need the income. The tax burden is huge and I don’t like to pay Uncle Sam unless I have too!!

I too have a small 10 unit that I have owned only for year and half, the value has al its doubled in that short time, but I don’t have anything or anywhere to flip the money into, so I’m holding. You have to remember, hedge funds and wall street have boat loads of cash they “have to” deploy somewhere! They really are less concerned about cash flow than they are with appreciation on the backside

 Holy crap: doubled in 1.5 years? Is that in Florida? It's insane the values of rental properties. And you're right about hedge funds and wall street but fortunately they seem to stay away from small multi-unit. That will probably change if single family homes take a crap. Of course, if single family home prices drop that means they can buy more of them. And probably will. 

Quote from @Paul Garcia:

@Tom O. Thanks for the feedback. Gross in one thing, Net is another. 

Yearly maintenance costs are around $25k for the labor side of it, but its disorganized having a different guy for this or that. In my mind, I was thinking this would be a great addition for someone who has a handyman business and could devote ~25 hours a week to the properties. But I agree, the pay has to be attractive enough for qualified people. 

I think you should try and get a property manager/handyman who will do cleanup, snow removal, small repairs like toilets and sinks on an hourly basis. I think I know of guys who will do this in Chicago. 

For example, I have a snow guy (Alex) who will remove your snow all winter charging you a flat fee for each time. The heavier the snow, the more he charges, obviously. He says he does rehabs and what not but I haven't tried him on anything like that yet. You could probably negotiate a handyman deal with him on an hourly basis without having to pay him a salary. PM me if you want his name and number. And I have a guy who is the neighbor's maintenance guy/handyman who would probably love to manage your properties and would probably work for a flat fee or hourly basis, not sure. 

BTW, if you need an HVAC guy or a plumber in Chicago I've got two really good ones who do quality work for a really good price.  

You must replace one water heater so you might get a better price doing all three. 

I would get more quotes on the basement leak. Can one guy due tuckpointing and basement leak? Must do outlets electrical stuff.