All Forum Posts by: Tony Angelos

Has anyone bought stabilized rentals lately in the Chicago area that comes close to the 1% rule? Curious what your latest numbers look like?

For reference, I've been seeing properties asking around 0.85%- 0.9%. And to provide some context, no, this is not how I evaluate deals, this question is purely for discovery what others in the Chicago market are seeing.

@Henry Lazerow thanks for laying this out so clearly, sharing on my social media as well

@Bedford Roberts That's a great start to this journey and you're doing the right thing by starting early. @Jonathan Klemm is right, the best mentors come organically, and I will also say in my personal experience, it's ok to have multiple mentors and coaches for different things. I personally have 3 and learn equally from all of them.  

Best course of action for moving forward? I'd say step 1 is to continue saving. If you're going to use the crypto gains, you need to take account of how much you'll pay on taxes for your capital gains. And for that, I think you'd probably need to talk to an accountant because I think crypto is classified as property by the IRS and tax rates vary pretty significantly.

@Michael Ream looks like a great deal! I've got clients doing projects right around here. How did you find the deal?

@Jonathan Klemm List is going to be at 250 and it's being used as a hair salon which has been there for 6 years I believe. 

And definitely, gonna shoot you a text now to run some ideas by you!

@Jonathan Klemm I would love to join this conversation because I've been very interested in STR. Sorry @Joe Binkowski, I'm as unexperienced as you in this space but just as curious, so would still love to connect either way!

@Jonathan Klemm I'm selling it, it's going live on the MLS this Thursday.

Great question, it's been self managed by the prior two owners. And something odd I've noticed is that 50-60% of the people I've spoken lately are looking to self manage. I suspect it's because returns are getting squeezed and in many situations it would be the only way to make a deal work, or it could be overzealous new investors who figure it's an easy job 😂.

Regardless, even with a PM, the numbers still look good. Intentionally, too. I understand it's a mixed use so there won't be as much demand as if it were a true residential building.

View report

*This link comes directly from our calculators, based on information input by the member who posted.

New deal coming next Thursday 3/25 to Chicago's Chatham neighborhood. 3 blocks south of the new Discover Call Center prioritizing most of the 1000 new jobs to people who live close. Job pay starts at 17.50/hr offering Discover's full benefits suite to provide major boost to the area. Tons of new development already going up along 87th street. 

Analysis is Pro-Forma, building has been mismanaged for well over a decade. Current owner has owned a year but needs to sell to prioritize funds on another rehab. Within the past year building has had: New roof with over 50% of the lumber replaced, new gutter system, tuck pointing, rebuilt boiler system, new decking system added.

Value add opportunities:

-Cosmetic updates to units

-Bring rent to market (been stagnant for as long as I can tell, long term elderly tenants)

-Convert (at a minimum) 1 of the 3 oversized 1 bedroom units to a 2 bedroom. The other two can probably be converted but not as easily.

-Add Paid Laundry. Nearest laundromat is kind of far.

- Rent garage spots or offer as part of higher rent.

-Add storage in basement. May not raise rent but may offer incentive to move in over competition

This area is primed for growth over the next decade. The City of Chicago is incentivizing heavily for investment into the area. Bus stop is right outside with easy access to transportation to Discover's facility (3 min CTA ride) or 11 minute walk.

@Bob Ross I'll bring up a counter point that I don't believe has been brought up yet. Commercial real estate has been obliterated during COVID. Simultaneously, the continuing printing of money has increased the desireability of inflation protected real assets. This has historically been Real Estate, but with large swaths of CRE being seen as undesirable at the moment, much will continue to be pushed into residential. Aside from that, lumber cost is up 300% or something from the same time a year ago. This alone attributes to something in the range of +$16,000 replacement cost of a standard american single fam home. Higher in more expensive markets. As build costs rise, inflationary practices continue, and commercial real estate remains undesirable, I think there is a strong case for continued appreciation in residential real estate.

@Henry Lazerow late to the party haha, but this is the kind of success story I come here for. Way to go!