All Forum Posts by: Tony Angelos

@Cory Lucas as someone pointed out, call the zoning department. In Chicago, there is a licensing fee and some alderman have already cut off new applications for the time being. Another good resource if you're not familiar is AirDNA. It doesn't need to be a huge market to have a profitable STR. AirDNA can give you some insight into what its demand and profitability would be.

@Peter Nicieja Welcome to the Chicago market, welcome to BP and congratulations on making this choice. I'm going to play devils advocate on the general advice to house hack a multi family. It seems lately everyone and their mother is looking for 3 units or more. They're trading extremely tight in Chicago from what I've been seeing and people are stretching their numbers to make them work. Not saying it won't work out, because it very well could and probably will, but condos are often overlooked. It seems to be a neglected asset class, especially in B-C class areas. 

@Michael J Scanlon gives a perfect example.

@Vante Jay I second what @John Warren said. Chicago has tremendous housing compared to other cities. The Chicago metro area itself has tons of opportunity. Having your license as a buy side agent doesn't necessarily help you unless you're trying to collect the commission yourself as part of your deal, but you still have to do all the work.

If you're looking to get started for under 100K, I'm taking the liberty in assuming you've probably saved up about 30-40K? I would encourage you to consider either house hacking or maybe looking in NW Indiana, Rockford, Waukegan, etc. Most properties under 100K in Chicago require some degree of rehab.

@Daniel K. There is a lot to unpack here. For starters, how long have you owned the homes? If they're paid off my answer changes, but I'll assume they're not.  Also, you're in Europe, which makes building a team in another metro harder and communication slower, so here are my suggestions:

1. Don't change anything. Austin appreciated a lot this past year, but so did most other places. So despite selling high, you'd also be buying high. It's important to think on a 10 year horizon and not like it's the stock market and you're day trading. If the deals worked when you bought them, are still working now, and appreciating, let your winners run.

2. Since they're SFH, you might not even need to sell as a portfolio in this market. Just put them all on the market (unless they're on the same street) and if priced appropriately, they'll sell quickly. You can take the proceeds and buy probably a few multi families in smaller midwestern cities that can provide more cashflow if you're concerned about losing a lot of equity for reasons XYZ. Since you're in Europe, it doesn't matter if it's Austin, Alabama or Alaska, you're an out of town investor so you mine as well go where the cashflow is.

If you are trying to sell though, you should take advantage of the exchange so at least identify and solidify a market you're going for. If you have kids, you can kick that bucket all the way down the road to your death and just wipe out that tax liability for them (assuming 1031s are still around).

@Frank Cosgrave I have one coming on the market in a few weeks, shoot me a PM and if you'd like to hear more about it and see if it's something that fits your criteria.

@Sung Park Curious what your living situation now is... It's a great goal to want to buy a property but it is important to think of it as an investment in the context of other investments. If you're going to be looking at a 3,000/mo payment, but a comparable rent is 1800, thats a 1200/mo opportunity cost. Rents in the loop area are depressed right now and you can get great deals like 3 or even 4 months free. That 1200/mo saving is just shy of 15K, which in a years time can put you in a better position to purchase a better deal or a 2 bed as others have pointed out.

Real estate investors need to be thinking on a long term horizon and sometimes that means waiting if there is better opportunity in a few months or whatever.

@Jonathan Klemm We had rosario terracciano on the Straight Up Chicago Investor podcast and he's the CEO of ClickInvest. You can check out the episode to learn more about them, they have a solid approach that I find very interesting!

@John Warren  @Henry Lazerow @Jason Albasha @Jonathan Klemm @Jason Deangelis

Lot's of good responses. Want to reiterate, this is not how I evaluate properties. It was more the product of some thoughtful reflection on my own assumptions. I talk with a lot of new/would be investors and hear the 1% rule brought up like it's the holy grail. As a broker, you expect a degree of education as part of the job, but it's got me even wondering where the 1% rule's genesis was and why it's so revered by new investors as an actual "rule"? Hence, wanted to get a sense of what the actual numbers were and I'm glad to see everyone's ranges from 0.75% to 1.5% basically.

And @Michael J Scanlon brings up a good point about valuing the components as well; just finished writing an offer on a property that came down to looking at it as a whole vs another property that needs extensive capex right out of the gate. Def not apples to apples. Good stuff

@Jason Deangelis glad you brought that up, that was kind of my point... much of what's available requires forced appreciation to get the numbers to work. I have seen very little stabilized turn key investment property lately

@John Warren that's a great point too, hence the disclaimer haha. Thank you for the feedback, that's great perspective!