All Forum Posts by: Tom O.

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. 

Motion in bankruptcy to lift the say so you can file the eviction. 

Hire an eviction attorney who knows his way to bankruptcy court as well. 

In Illinois the proposed law had no automatic rent increases allowed with no caps. Instead you would have to go before some Soviet style regional bureau and beg for an increase based on some formula using inflation. 

So doing the math you're grossing at least 541,000 a year with 41 units at an average of 1,100 a month (which is low for the northside of Chicago). You want to pay someone $50k but you want to split that with someone else? On the one hand a PM will charge you 7-10 percent, right? But they will take care of all of that. 

A maintenance guy who shovels sknow is not going to be able to do plumbing, electrical, and HVAC unless you're talking about changing the furnace filters and not much else. I have guys who might do what you seek for $20-25 an hour. At $20 an hour times 40 hours a week you're looking at $38,400 a year. A plumber or electrician won't work for that. 

Although I don't recommend it if you have a free apartment that goes with the deal maybe that salary would work for a higher qualified person. Anyway, I do know guys who will maintain your building, cleaning, snow removal, light repairs, etc., on a per building/unit basis or per hour basis (I think). 

What happens with guys like you who have that many units is they create a property management firm within their own management and do it for others as well. Maybe if you pool together with some other owners you can bring more resources to bear and start your own PM company. 

I used to buy when I saw apartment buildings that were priced at 10 times NOI. Now nearly everything I see is 10 times the gross income. And they keep selling.

From the buildings I bought every seller had a reason to sell. Selling now because the value's have run up substantially doesn't seem like a reason to me but I'm only 4 years into this journey. If you have something better to do with the money then sell. If you don't; don't. Selling now so you can buy later is a huge speculation that prices will fall. 

Nothing suggests prices will fall. Even if we have a recession or the regular RE market for single family homes takes a crap that means even more rental demand, right? Because people who should be buying homes are still renting apartments.