NEW: BP Podcast 66: Flips, Apartments, & Protecting Yourself From Professional Tenants with Michael Blank

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Mike H.

Manteno, Illinois

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Sr. Business Analyst by day. Real estate investing is my passion when I'm not working - along with fantasy sports and chicago sports. :-)

Experience

My first investment was about 6 or 7 years ago as a flip. It was my sister's neighbor and they were walking away from a house that was worth more than what they owed.

Tried to get people to partner with me and nobody wanted to get in on it. So I did it myself and made 20k.

The market turned shortly thereafter and I've been buy/hold ever since. Some of my first deals weren't very good by today's comparisons but they're all cash flowing.

I currently have 26 SFH's averaging about $350 per month net before repairs - most of which were bought pretty much for no money down. Although I have been starting to put some money into some of my deals these days (5 to 10k).

Typically, I buy with private/hard money and then refi into conventional or a commercial loans to exit out of the private/hard money.

2013 was a great year for me. Was able to add 6 houses in really good areas. And I'm off to a good start for 2014 getting a steal of a deal on a house in Beecher. Probably one of my better deals yet. And have picked up three more as well since then.

Trying to stay on pace for one a month now. But I think that may end soon. Hopefully, I can manage to pick up 3 more for the year to hit 30.


Real Estate Goals

My goal is to keep adding sfh's as fast as I can at these prices but typically the most I have been able to do is about 3 a year. The past 6 months have been crazy though so maybe that pace can be bumped up to to 5 or 6 a year

When the market returns and the houses won't cash flow at these rates any more, my strategy is going to be to try fix and flip. Then take the profits (20k?) and use those to buy down the purchase price of another house to cash flow where I'm at now.

I want to keep chunking in the cash flows as best I can. I like to think of my rentals as employment insurance. If I lose my job, I can get by on my rental income. Maybe not indefinitely but at least long enough til I find the job I want.

Eventually, I want to move toward multifamily. Even though, right now, I don't see the numbers in multifamily making sense when compared to the SFH. And I love how little effort I spend managing my properties.

I recently was able to put together a deal with a bank to buy 2 duplex lots. Put down 15% and bought the lots for 22.5k (they were going for mid 50s to low 60s back when builders were building).

Goal is to build duplexes and hold them. My estimates are that I'll need to come up with about 35k to 40k for each duplex (on top of the lots I'm already putting money into) and should be able to make about $600 a month per side (before vacancies and repairs).

Figure thats one way to lock in some pretty good cash flow at a later date.


Currently Seeking

More deals. I am on the lookout for SFH's with a minimum of 1,200 sq ft, 3+bdrm 1.5+ bath that will appraise out around 120k+ and I can be all-in for 70% LTV or better.

Specifically looking at Bourbonnais, Manteno, Beecher, Peotone, Monee, Bradley, Braidwood, Bradley and Crete.

The financing - both rehab lending and end loans - has really seemed to open up for me over the past year. I've now got some really good rehab lenders and more end loan options than I ever thought possible.

But I'm always looking for more - at least on the end loan side. A dream loan product for me would be LTV to 70%, amortized over 25yrs at a decent rate (5 to 5.5%).


Markets

Illinois


About Me

Began Investing April 2005
Member Since June 12, 2009
Website

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