All Forum Posts by: Trevor Fritz

I am closing tomorrow on a condo property in Chicago. It needs a significant amount of work to rent it out, but mostly just the basic renovations (kitchen, bathroom, flooring, paint). I can do much of this work with my dad. The unit is in an ideal place for me to live in the city and otherwise would be paying rent so I can quickly fix it up and rent it out or live in it for about a year and then get it ready to rent out. 

My question revolves around taxes and write-offs. Should I claim this as my primary residency and take the homeowners exemption ($400/yr) or should I claim the write-offs (est. $15k)? Is there anyway that I could take the home owners exemption, do a couple basic things to improve my standard of living and then move out in order to quickly fix it up and pay for the more big ticket items the second year and then claim those exemptions? Thoughts? Opinions? Thanks everybody! 

Thanks @Edward B. I came to the same conclusions, but it helps having another opinion. 

Hey everyone, I am in a unique position and looking for some guidance. The short question is, should I take a loan if the borrower is willing to do an interest only loan for the same interest rate?

This is a family member who is willing to give me a loan of 5% interest only with as little as 10% down. If I have this option, should I amortize this loan (I think I am using this correctly) or should I take the interest only loan? Obviously the interest only loan will give me more cash flow, but I did not know if there are benefits to using the amortized loan. Thanks!

Hi everybody,

I have been searching for about 6 months for a 3-4 unit multifamily unit in the Chicago area, preferably north side. I am also planning on using an FHA loan, which has made the process more difficult.

At the same time, whenever I run through numbers on my spreadsheet using the 50% rule as a first check, the cash on cash returns are almost always in the negatives. For the record, I run side by side FHA 3.5% down as well as 20% down scenarious. My numbers are run with an FHA loan that considers factors Is the 50% rule too conservative, or are there simply not good buys right now in Chicago. I run any decent looking property that I get sent to me on the MLS through this and time and time again I find near 0% Cash on Cash returns.

Are people in Chicago simply buying for appreciation or am I missing something? Thanks for the insight!

@Brie Schmidt Thank you. I am looking in areas just outside of Wicker and Logan Square as well as Avondale, Lincoln Square, Albany and Irving Park. I was told that the rents must already be in place and cover the PITI, which is difficult to find properties that meet this criteria in this price range and since I would like to improve the quality of the units as well once bought. Is this simply extremely difficult to find and few and far between?

Thanks!

Hi everyone,

I have been searching for a 3-4 unit multifamily for a few months now, but because I have been searching using FHA guidelines from a lender I was referred to, I have not been able to find anything.

I feel that my lender's guidelines may be strict, but I wanted to see if anyone has closed on a multifamily in the Chicago area using an FHA loan in the last year or so. I was under the impression that the FHA guidelines are universal, but I haven't even found a place that would qualify yet for me to even look at. I wanted a second opinion from the community. Thanks for the help and I look forward to hearing back!

Hi Chicago,

I am looking for an investor friendly real estate agent. I am looking for a 2+ unit in the north / northwest sides of the city. Please comment or DM me. I  am looking for someone that has experience investing in the Chicago market and preferably owns property as well. I am interested in someone who can give advice along with help show properties in specific areas I am interested in.

Thanks!

@Crystal Smith thank you very much for the insight. That makes great sense and will take that into account in the future.

@Crystal Smith That is some great advice. Would my real estate agent be getting me the information sold price v. list price or would that be information I would dig up? Would this be a percentage that I would compare or more of a ball park difference between properties?

@Kumar Paj That is a great point. Most of the houses I have looked at have been between $80,000 to $180,000. 

I have not thought about the use of duplex or townhouses with low HOA fees for cash flow. That is a great point that I have not seen made so far. Thanks for taking the time and really rethink my approach!