All Forum Posts by: Eric La Pratt

I just hung up with Sarah @ TU - she was super helpful. I'll let @Andrea Collatz chime in but, from what I understand, the sites are actually different. TU's app dev team is going to merge both accounts into one.

Also, it looks like the "What is the minimum Income you are willing to accept from applicants?" question has a field where you can enter a custom number. Sarah explained that that is actually additional income, not a custom income threshold. Good to know and sounds like she will take that back to the dev team to correct. Hopefully the custom field ends up being custom, not just additional. I would rather see both a non-W2 additional income function AS WELL AS a W2 custom income threshold level.

I have an account with TransUnion's MySmartMove.com before I ever heard of BP. Now that I love BP, I want to support them and went to TU's SmartMove via BP. It said I didn't have an account... so I made one thinking maybe my previous one was under a different email address.

Nope.

I now have the same login for www.biggerpockets.com/mysmartmove.com as I have for www.mysmartmove.com but guess what? They're somehow completely independent of one another.

Literally: Same email address, same password but two completely different dashboards. The tenants I screened 2 years ago are the most recent thing on one, the tenants I screened the other day are on the other site (the BP one). Can't find either of the tenants in the other site.

Frustrating... and wtf?

Furthermore, I ran into a problem I was concerned I would have in this most recent screening that is holding up the proper screening of applicants which is, in turn, holding up renting my property which, in turn, is costing me money. No one has responded to my submission on the "Contact Us" page, I had to call many numbers this evening to find someone who could give me a number for support and was savvy enough to find a support email posted in a thread here on BP.

What gives? Why don't you have a support number for the landlords/real estate agents?

Has anyone else had this experience or noticed this?

@Jo Ross That is a great question! My contractor is working on multiple projects, not just one. What is the timeline that your lender gave you to complete the project? Six months I am guessing?  It would be worth having a couple of contractors walk-through just to price it out.  Should have the blank BOR to give to GC's, right? I'm not familiar with changing contractors midstream in a 203K but would be very interested in knowing! 

Fe Kelly 203k are FHA rehab loans where the home and rehab costs are rolled into one loan. They follow the FHA loan rules and are available for SFH's up to 4-unit dwellings only. In Chicago, there are *often* multi family homes with 1 extra unit that is not technically legal, so sometimes financing these purchases can be tricky but it is never impossible. A good lender and agent is critical to getting these done and, for me, it was the only way to go. Many agents, and you've read above, are not knowledgable and it takes a good agent on the buyer side to educate the seller agent. Again, I cannot say enough about my agent who understands this and often is teaching sellers agents about this, getting a buyer into a deal that a seller may otherwise pass on.

Woohoo! Go BP!

Originally posted by @Isaac Plumb:

Hi Eric,

I am in Chicago looking for a similar opportunity but I have been discouraged by both my agent and lender to use 203k loans in this market, due to the fact that they are more complicated and take longer to close typically.  So I am very interested in your success! Was this not you experience?

Isaac - Everyone is in a different place financially. If you have a large amount of cash reserves with great income and a risk tolerance, then they may be right. However if your agent and your lender are discouraging 203k *only* because they take longer and are more complicated, I suggest immediately finding a new agent and lender. Hands down, no questions asked, just walk away.

I would never have done what we've recently done any other way, unequivocally. My agent and lender were nothing short of extraordinary. PM me and I'll send you their info if you are interested. Yes, it is more complicated. Yes they take longer to close. But as a new investor, this is all a major benefit to you. Doing a 203k with a solid team is like training wheels that prevent you from tipping the bike over no matter how hard you try. You learn TONS more, you are forced to dive deep into analysis during the scope of work process and you take more time to make an intelligent decision. There is another 5% down non FHA financing that is worth considering, too, but I did not go that route.

Also I was able to get 3% back on the purchase price at closing while only putting 3.5% down. Do the math and you could consider that as getting a building in Lincoln Square for .5% down for the property + 3.5% down on the rehab price. For me and my situation, it was a no brainer.

Welcome aboard, @Jonathan H.! I just closed on my first Chicago multi-family and am doing a combination live-in-flip + BRRRR also known as a house hack. Construction just started, actually. So if you have any questions, let me (or anyone on BP for that matter) know! I suggest coming to a REIA that meets every 3rd Tuesday of the month. Here's a post to April's (just passed) https://www.biggerpockets.com/forums/521/topics/292901-chicago-meetup---april-2016

Thanks @Jacob Anderson. It does feel like finding/creating deals is the next step... and I need to learn that end.

Where does one begin to hone their skills at this? How does one choose an area?

We've closed on our 203k multi-family house hack on Chicago's north side and are going through the motions of construction now. I have 6 units total and I want to get to 15 by the end of 2017... so 9 more. Big question is: Now what?

My previous goal was to leverage as much as possible to score something as big as possible and have achieved that with this current house hack. Chicago is a big market. Because of that and the goal I just achieved, there's not enough left over after this recent acquisition to do much of anything here and I would rather not look at another market (I am in metro-Detroit and Chicago proper already).

Shifting gears certainly is the only way forward at this point, no? 

What sage advice is there at this point for a cash strapped investor with an 8a-6p job + a family? Find deals? Find JV partners? Find a mentor?

Answered my own question via IRS for anyone interested in this:

You cannot deduct transfer taxes and similar taxes and charges on the sale of a personal home. If you are the buyer and you pay them, include them in the cost basis of the property. If you are the seller and you pay them, they are expenses of the sale and reduce the amount realized on the sale.

https://www.irs.gov/publications/p530/ar02.html