All Forum Posts by: Aaron Zimmerman

1. Figure out the scope of the rehab. This will impact the purchase price and amount of cash you need to the deal. 
2. build reserves - ideally you have a steady source of income to add to the property bank account. For that amount of property, I'd feel comfortable with $10k in reserves not including renovations. 

3. build your list of handy people and tradespeople by going to local meetups and being active in local Facebook groups. 

4. due diligence - top items im looking for on the inspection are sewer scope, extent of rehab, big items (roof, hvac, etc) 

If it were Me, I would reach out to the bank just to be sure they're comfortable with you putting the property into an LLC. You could trigger the due on sale clause. Better to let the bank know of your plans than have the loan called due (albeit unlikely)

Are you able to use Google voice/get a US number?

There's a few areas that you might be able to get that price point. I'm not intimately familiar with all of the markets. 

South and southwest Chicago suburbs 

Elgin area

Gurnee and surrounding area. 

there are other pockets where you can find houses cheaper but there's really not a ton. The closer you go to Milwaukee, you will tend to find cheaper housing

Yes. There's a lot to digest here. 100% bonus depreciation is going to be a huge boon to real estate investors.@Dylan Brown is 100% correct though that it's not all property which is an important reminder. I did see one provision in the bill that was pretty crazy. A 100% deduction for construction of plants within the US. To be clear, this doesn't apply to 99.99% of real estate investors but an interesting incentive nonetheless. 

I agree with Dylan. Original property would be 60% bonus depreciation. New structure would likely be 100% assuming you do the work after 1/19/25 with the new bill. 

The next question becomes, can you use those losses against your active income? If yes, you can do a cost seg. If you can't I'd recommend that you don't do one until you can use the losses. 

Welcome! Just a thought: would it be Possible for you to do a live in flip with your primary residence? You'd have access to a 0% down VA loan and if you upgrade your house over time, you could exclude up to $250k of gain if single and $500k if married for your primary residence.

@Renee Krystek - welcome! It is Definitely not easy to do short term rentals in Chicago. There's no sugarcoating it. However, it's not impossible! 

Once you figure out your market and buy a property, there can be some significant tax advantages. Just make sure to rent the property for 7 days or less, find a way to materially participate by working in the business and tracking others hours, not hiring a property manager, and not using it too Much for your personal enjoyment. With 100% bonus depreciation being back, it can be highly lucrative. That said, make sure the STR is a good investment for you

Welcome Andrew! Happy to connect with you and share some notes. You'll find the Chicago investors are quite helpful and collaborative. I'd recommend listening to the straight up Chicago investor podcast and attending some local meetups

I would recommend partnering and to not over leverage yourself. If you're tight on cash and buying a 5+ multifamily, the value is based off NOI. Let's say you get hit with higher than expected taxes and insurance as well as lower rent growth than expected, you're going to be a tight spot when you refinance after 5 years.

The worst thing you can do for yourself is run out of cash. That's one of the only ways to lose in real estate over the long term.