All Forum Posts by: Victor So

Quote from @Carl Dela Cruz:

Hi BP family! Recently picked up studying real estate investing and was starting to solidify my plan and was wondering if there were any general shortcomings with my vision. I am currently a 21 year old living in the Chicago suburbs planning to attend graduate school starting January 2023. Because of my lack of capital, experience and also time I was planning to househack starting next year around March to get my bearings. I found a partner who is willing to househack with me (so we're aiming for a 2BR duplex) and saving $14000 in total to get this started off. We are planning to get an FHA loan for a $200,000 unit (preferably on the newer side to avoid any project and repair costs) and split the downpayment costs which will leave us with ~$7000 in capital to account for any small repairs and short term vacancies (hopefully im doing the math right)! By the end of year one we will have moved out and rented out the second half of the duplex to get even more cash flow. Right now we also have a property manager who has his real estate license (but we plan to self manage until it becomes a bit unsustainable) and are currently going to be searching for contractors, etc. Are there any underlying problems or critiques which could be offered with this plan? Thanks!

Hey Carla! Househacking is the best way to go for starters. I’ve househacked 5 properties in the last 5 years and acquired 7 units this way. I’m also under contract on my next househack which is a 3 unit. Just make sure your partner has a stable W2 and good credit since that’ll determine whether he’ll qualify for a mortgage. Also, you should set aside a little more money for closing costs and reserves. 

This would be awesome. I’m in! 

Start with your own backyard since it’s probably the market you know best! I would get a stable W2 job, get pre-approved for a loan, and buy a home/apartment to house hack (live in part of the house/apartment while renting out other parts). 

Hey @Brad Knight , a lot of great suggestions above. I know you mentioned you don’t like your 9-5 but I’d be cautious about quitting since this will prevent you from getting loans under your name. If I were you, I’d keep the 9-5 (or find another tolerable 9-5) and househack. That’s basically what I did for the past 5 years. I househacked one property per year and acquired 7 units that way. I still plan on househacking one property per year while pursuing other real estate deals. If you want to discuss more, shoot me a DM 

Welcome @Najeeb Mohammed ! You’re definitely in the right place. There’s are tons of resources in this website and many successful real estate investors who can help you. I have a few rentals on the northwest side of Chicago and north suburbs. Let me know if you want to chat! I would love to help you in your journey! 

Hey @Zakir Pasha , not to be negative, but I'd be cautious about high rise condos along Lake shore drive. Most of them have high HOA fees and climb exponentially. It really depends on how old the building is, what kind of high rise building it is, and what amenities it provides.

I speak from experience. I used to live in a high rise building right off lake shore dr in edge water in 2017. The building was super old and a couple special assessments were slapped on to fix things around the building like windows and balconies. We also had a pool, management in-house, doormen, maintenance people in-house, etc. Because of all of these things, I started off paying 850 a month and within a year climbed to almost 1000 a month. I heard it is much higher now. And usually they have strict HOA rules so if you were to do simple maintenance or rehab in the unit, you'd have to go through many hurdles.

I’m not trying to discourage you entirely for making the move but I’d do my due diligence thoroughly. Hope this helps! 

Awesome! Congrats! What area was this property in? 

Yeah, some of these deals don’t seem to make sense. I think some investors are banking on appreciation in some areas and others count on expenses (like vacancy, cap ex, and maintenance) to be lower if units are renovated and stabilized. Others find creative ways to make extra Income by renting out extra storage spaces or the garage. I try to find properties where I can do the cosmetic renovations myself to push appreciation a bit. 

I had a client who closed on a duplex in Skokie a few months ago. He got a renovated 2 unit building with a non- conforming basement for 500K. He rents the 2nd unit for 1800, lives in the 1st unit and rents the basement for 800. He also rents his garage out for 200. After he moves out, he expects to get around 1700-1800 in rent for his own unit and accounting for 5% for capex, 5% for vacancy, 5% for repairs, he expects to cash flow about 200 bucks. We didn’t account for property management but he’s okay with that for now. 

Hey @Sandra Pinzon , as @John Warren mentioned, landlords usually cover the gas unless it’s metered separately. However, I’ve noticed that some landlords are starting to charge their tenants a flat fee (ex. 50-60 bucks a month) for gas. Not sure though how they would structure that in the lease but your best bet is probably to upcharge on rent to make up for the difference. 

Love this idea! Would love to connect!