Client deal diary 2 unit Albany Park: $100k net by taking on an eviction

[Henry Lazerow]

Sometimes you need to buy the deals with "scary" issues that deter other buyers in order to get a good deal! 

The property was a 2 unit in Albany Park with a duplex up 3/2 unit bought off the MLS for $330,000. The reason for the low price was that the tenant was mentally ill and clearly on drugs refusing to pay any rent. This was during covid when the memorandum made it take a full year or over to evict so most buyers avoided the deal instead of running the actual risk numbers. What we did was run the numbers figured worst case takes 15 months which comes out to a $25k hit so deal still worked but planned to instead offer cash for keys figured around 50/50 chance tenant just takes cash for keys first month. Tenant ended up taking $1500 cash *probably to buy heroin lol but it worked and got him out first month after close. I have also had a client succeed with cash for keys on a Logan Square 2 unit which was a similar situation and got us some equity. For both loans to make the buildings possible to buy on conventional financing we paid the tenants cash to let us in for 20 minutes during appraisals.

Recently sold the building after doing no work other then paint for $460,000. I represented both the buyer/seller for the sale in an off market transaction and the building actually appraised out at $480,000 so worked well for both parties! 

For the 3/2 unit my client rented to a corporation who themselves subletted the rooms at $2100 lease and then garage was rented for $300 on a website called Spacer the 2/1 was vacant at time of sale. The corporate lease has run well with no issues on our end.