All Forum Posts by: Tony Freeman

Yep! We'll be doing it A&N Mortgage!

Hi everyone! Please join myself and my co host Andy Smith(Lender) at our Chicago investors networking event October 12 6pm-8pm. The purpose of this event is to bring together like minded individuals whether they are experienced investors or just starting out, and build strong connections that help you in your journey as an investors. Building a strong team and rolodex of connections is one of the most important things you can do as an investors, especially when you are first starting out. Our goal is to have you leave with more connections and more knowledge about investing and the market than what you came in with and to answer some of those burning questions that you just can't quite find in the books. This event is very casual and there will be light refreshments and snacks, so just come relaxed and ready to meet some new faces. Can't wait to see you there!

1. Go to networking events: This should be one of your first steps along with engaging with other members on this site. Investor meetups are typically filled with a variety of people such as experienced investors, first time investors, developers, real estate agents, lenders, inspectors, attorneys, etc. Pretty much you could potentially meet your whole real estate team that is going to help you get your first property and even after, just by going to an event. Not only do you get to pick the brains of people that are in this field with you that can share their experience when starting out as an investor but also your comfort level skyrockets because you're in a room with so many people that have successfully do this over and over again. 

2. Find a knowledgeable real estate agent: Investment purchases are in their own field when it comes to real estate and you want to find someone that knows the hottest areas to invest, what is going on in those areas, has a nice track recorded of helping investing clients, and just ultimately knows what it takes to work with investors. 

3. Talk to a lender: Even if investing is something that is brand new on your plate and you probably aren't even thinking about starting the process right away, I always recommend at least chatting with a lender. They will give you a lot of helpful information on the loan process, the price point you'd fall within, and just any other loose end questions you may have on the lending side of things. Taking it back to having a good agent, the agent you are working with should have a rolodex of resources for you and should have at least one lender that they usually work with that has a great reputation. 

4. Be patient: When it comes to investing, there are a lot of other factors you have to put into play as opposed to finding a place that just fits your personal needs. Some people can find their first investment in a few weeks and some people it may take a few months but the first one is the most crucial because it sets the tone and should give you the motivation and eagerness to start on your next one.

It's really important when you become an investor to know your rights as an owner as well as the rights of the tenants. In Chicago, the law favors a lot more for the tenant's rights than the owner's rights. Because of this, I never suggest to my clients to charge a security deposit and instead suggest they charge a non-refundable move in fee. 

For starters, a security deposit can definitely intimidate a good amount of renters from renting with you, even the most qualified. Secondly, in Chicago, if there is any mistake at all made by the owner when it is time to return the deposit back to the renters, the renters legally have the right to sue you as the owner for up to 4 times the amount of the deposit. For this reason, I suggest my clients to charge a non-refundable move in fee to help rid you of that possible nightmare. Non-refundable move in fees are also a lot less intimidating to renters as the amount is significantly less than a security deposit. Even if you run into a situation where your tenants have damaged things, you still legally have a right to sue the tenants for the damages with a non-refundable move in fee. 

Long story short it is just a lot safer and you don't have that potential headache down the road. 

Hi Kevin!

I'm glad to hear you are starting to expand into the commercial side of things! I have a great connection for you. His name is @Jonathan Klemm. I have worked with him on multiple deals and not only is he an experienced investor/developer, he also is a contractor and knows all the ins and outs of rehab work. He is currently looking at some commercial things as well and I'm sure he'd love to spread some of his knowledge!

Hey Mike! That's amazing that you are being so proactive at 25 and looking to invest. Definitely something I wish I would have done at 25. I can't speak to you about the New York market and what you can get for your money out there since I'm in Chicago but I do think $45K is a healthy amount saved up for your first multi-unit. With putting 3.5% down with FHA, I'd say you'd want to probably cap your amount at around $750-800K because you also have to take into consideration your other closing costs. Also, you'd want to stay at 4 units and under because once you get to 5 units, that's when the building is considered a commercial building which you then would have to get a commercial loan and that is minimum 25% down. Hope this helped a little!

When you are new to flipping, the most important thing you have to understand and be ok with is the risk level of it. Flipping could be your biggest and quickest financial gain but it just as well can be your biggest and quickest financial loss. You have to be even more careful now more than ever with the properties that you take on for flips because what I've been seeing in the Chicago market is rehabs taking longer due to orders being extremely backed up and overall costing a lot more money. 

I'm no GC by any means but I've worked closely enough with clients that flip or rehab places and I typically can give you a pretty good guesstimate of what the rehab would cost from what I've seen but lately what I've heard from clients that have gotten quotes from GC's, the cost of the rehabs have been like $60K+ more than what I typically have seen. So please do your homework on where you want to flip, what you want your return to be, and also try to be as open minded and realistic as you can be. Also, please understand that the seller isn't selling their place based on what you want your numbers to be. Yes everything is negotiable but only to a certain extent and with the low inventory and high amount of buyers, negotiating has become increasingly more difficult which takes me back to my previous point of being realistic. 

Awesome Eric! It should be a way to rsvp on here but if it’s not working you can use out meetup link https://meetu.ps/e/KmBjz/T7qck... see you there! 

Well, with all do respect, if that was the case I would not have completed a single sale this year as all of the sales I’ve done have been as-is from completely gutted $300K multi-units to $1M+ new construction multi-units, I’ve gotten to some sort of resolution with the other side if we needed to ask for something additional(which is never my first choice.) But that’s the perks of working with an amazing agent such as myself. 

God Bless

This is why I put a very limited set of scenarios. No one said the seller is obligated to give a credit for these in fact if you read the entire post you would see that I mentioned that as a buyer you should be prepared to not walk away with anything because of the as-is sale. No buyer and no real estate agent during an initial showing is going to know that there are shingles or punctures in the roof, that there are higher than normal moisture levels signaling that it could be problems with a roof, that a deck is not up to today’s current code, that there are cracks found in the sewer scope, etc. 

These are all things that can present major problems and if you are an investor that is looking for something mor turn key, a first time investor/owner occupant, these are things it wouldn’t hurt to ask for a credit for during A/I. 

If you are flipping a place or looking to do a gut rehab job, it doesn’t really make sense to ask for these kinds of credits. Because I advise my clients on what to ask for and what not, this has always led to me being able to come to some resolution with the opposing side even with some of the most difficult sellers and buyers.