Anyone have experience with Elite Investing in Chicago?

Question

This company in Chicago has a seemingly nice business model for turn key REI passive income. They try to find less expensive but non crime infested neighborhoods, purchase old brownstone or greystone homes with solid bases, and totally gut + rehab them. Then their business model seems to be turning those into rental properties, selling them to investors, and then being the property managers.

What do you think?

Charles Worth · Answer

@Alex Zuroff

I have found that the estimate of appraised value is typically fairly spot on, Alex has been good at estimating that.  That being said, I would ask Alex if that number is appraised value he is normally very responsive (I really never bought off the web site).

@JR Hinds  agree on property management though I will say because its section 8 the process to fill vacancies is longer because you need to get an inspection etc. you can't just move someone in there and if they did you would regret it least that is my take and yes def frustrating.

@Jeff Schroeder

Not that it was addressed to me but I was initially not going to do TK or Chicago before I met Alex. I think Alex and his reputation is the most important piece and he has stood behind his product even when he didn't have to.  He doesn't sell anything else (no courses, classes etc.) and doesn't really do the hard sell.

JR Hinds · Answer

With the two properties I purchased through Elite last year, the purchase price was at or slightly above what I believe the market price was. But both of them appraised right at the purchase price.

Nick Patterson · Answer

Check out Brie's website, I think that will be of use.

http://turnkey-reviews.com

JR Hinds · Answer

Yeah, I've purchased 2 properties from them in the last few years. They had some challenges on the property management side (a lot of staff turnover, and they needed a lot of oversight), but they seem to have fixed those issues.

I think it's a good model for someone with a full-time job who wants to grow their passive income. I'm heading back in a few months to look at more properties. But I'll be interviewing another turn-key provider when I'm there, just to see the difference.

Account Closed · Answer

I bought one 2-unit property from them in April of this year.  They did not rehab it as described, and property management was negligent.  They collected $4000 in rent between May and July, after which I fired Elite Rentals Chicago.  They still haven't paid us a cent of that.  We've been in communication about settling -- having them pay what they owe me in rent collected and also for what I've spent to fix the most neglectful parts of their unfinished rehab job.  But the settlement agreement they would like me to sign prevent me from writing this post, or talking about my experience with Elite at all.  That may be why you don't see a lot of bad reviews here-- people who had a bad experience may have had to sign nondisparagement agreements just to get paid rent on their own properties!  If this post disappears, you will know why.

Here's a copy of the complaints I submitted to the Better Business Bureau.  One is for Elite Invest, LLC, the company that markets the real estate and oversees rehabs.  The other is for Elite Rentals Chicago, LLC, the company that handles property management.

BBB Complaint: Elite Rentals Chicago, LLC

9/20/18

I hired Elite Rentals Chicago in April 2018 as part of my purchase of a turn-key investment property through their sister company, Elite Invest. Elite Rentals Chicago mismanaged tenants, withheld information, and most importantly, has still not paid me any of the rent or fees collected from tenants in my property.

Elite has very clear written guidelines about screening tenants, but did not follow them. They had a tenant move into my property in April or May without informing me, and without collecting a move-in fee. That tenant then caused damage to the property and moved out without paying. I've been requesting information about what happened with that tenant for nearly 5 months now, and have not received a straight answer from Elite.

There was then a long delay in placing tenants. A tenant moved into one unit on May 15, and Elite collected rent and a move-in fee at that time. A tenant moved into the other unit on June 15, and Elite collected rent and a move in fee on that date, too. In all, Elite collected a total of $4000 before I fired them as a management company, effective June 30, 2018. They have not paid me a cent of that money. After we subtract the $240 in management fees owed to Elite, and add the $1000 reserve money in my management account with Elite, plus the $208 of rent that Elite neglected to collect from one tenant with no explanation, Elite Rentals Chicago owes me $4968. This figure doesn't include damages caused by the unauthorized tenant that I have since paid for.

According to our management agreement, Elite had until July 30 to settle all accounts. They did not. Instead, Elite simply stopped responding to my emails until August 3, at which time they got in touch to settle this dispute and my dispute with their sister company. They offered a settlement that would have prevented me from talking about my experience. After a few attempts to work out the details, they have again stopped responding to emails as of September 4.

BBB Complaint: Elite Invest, LLC

9/20/18

I bought a 2-unit residential building through Elite Invest, LLC on March 30, 2018. Elite Invest advertises complete rehabs of all of their properties, and I toured several rehabbed properties in 2017, all of which looked very good. However, they did not actually complete the rehab on my property by the closing date, and mislead me into thinking that they had. They left several glaring, essential parts of the rehab unfinished. They also failed to rehab my property to their own written standards, and mislead me about what had been done. The property was technically purchased from an anonymous trust, but Elite Invest LLC handled all the sales and communications, as well as the rehab. I can only describe what they did as fraud.

Here are some of the most egregious problems with the property:

• The building was connected illegally to the electrical pole without installing meters, prompting the power company to threaten to cut off the power and fine us. We worked it out with the electric company, but it has cost me nearly $2000 to install meters and properly ground the electrical system.
• The property was never connect to natural gas, causing our tenants to live without hot water. It has cost me around $500 to credit tenants for that hardship, and more to connect the building to gas.
• The front steps were not finished to code, causing a tenant’s parent to fall. They threatened to sue me, and it will cost almost $1000 to fix the steps.
• Elite installed the locks that can be opened with the same key on both units, creating a totally unnecessary security risk for my tenants. It cost more than $400 to replace the locks.
• There have been several more problems with the rehab: a leaking roof, trash in the back yard, poorly installed tiles that broke within two months of a tenant moving in, plumbing that backed up and flooded the basement with sewage within two months, and more.

In all, it has cost me $4149 to repair these things so far, and new problems continue to present themselves.

Mark Ainley · Answer

@Brie Schmidt @Momk M.   Thanks Brie and nice to meet you Momk.  Send me an email or PM with the address you have and I can see if we have coverage.

Brie Schmidt · Answer

Talk with @Mark Ainley

Momk M. · Answer

Has anyone looked to transfer management companies? Are there any reputable mgmt companies in Chicago that would take on units?

Jeff Schroeder · Answer

So I've entered a contract with Elite on a property in Chicago's south shore neighborhood. The renovation is taking longer than they originally expected and the final closing date has been pushed back from originally being Feb 31 to Apr 31st. I'll let you more when they're done entirely with the renovation and I get a non-elite home inspector I trust to look through it. Otherwise, I'm pretty happy thusfar. The only caveat is that you need to reach out to them to ask about timelines. When you do, Alex gets back to you and lets you know what is up.So long as I'm not currently paying for it, I don't mind when they finish so long as they tell me when to come do the closing.

Sunny Shakhawala · Answer

@Jeff Schroeder - any updates on your experience with Elite Invest? Looking forward to an update! I'm considering them as well.

Anyone have experience with Elite Investing in Chicago?

Most Popular Reply