All Forum Posts by: Bogdan Cirlig

Having lived in Chicago and also owning properties in there, I can tel you one thing for sure: There are differences between day and night as you move from block to block.

So, massive due diligence please. Crime, schools, rent and sales trend on a block basis. Ask people in here who live and do business in specific area you want. 

Vacancy needs accounted for when you calculate the yearly income. You make assumptions that you will rent the property at say $1000/mo for next 12 mo. When you get a vacancy that's 8%, it means 1 month less income in your yearly NOI calculations. So yes, you need to account for it. Also the side effect is a big vacancy rate will add more doubt of your ability to keep the property rented.

That "hi there" should be a catch phrase, think of it like "email subject", it's a decisive factor if the rest gets read or not. I think it's a lot of text in first page. You should deliver your message in the following thresholds: 

First 3 seconds, first 10 sec, first 30 sec. You must ensure you take the reader from one to the next. If in first 3 seconds you failed to arouse interest, you're following the beaten path to the trashcan.

The content is great, but I'd deliver it in steps so it won't look like "overwhelming".

I never do deals without knowledge of local market situation, crime vacancy and trends. Check foreclosure notices trend on that block as well.

Back to numbers, that cushion for monthly cash flow is so small that just to fix a broken AC will completely blow this deal out of the water. Deal is "floating" but on thin cover.

I've been mildly shocked to see a lot of for sale posts (not only on BP but other sites) in which the seller presents the numbers that make a deal look sooo good, at least on paper. Things like CAP 25% are frequently thrown into the mix.

However, do your homework AND ensure you can actually keep that property rented, at all. Things to look out for:

• Out of state owner selling :)
• Bad asset class (C, D ?). Drive around the block.
• Crime rate in that neighborhood
• Property in need of rehab (in a high crime area, uhu, most likely looted)
• Vacancy rate (I saw 40% vacancy in Flint, MI and other similar places) 

High vacancy rate is a huge red flag, that means, empty houses, lots of them or worse ghost towns. Be wise and complete due diligence. Don't buy the numbers only, check the reality and assumptions used to make those numbers.

Zilpy Rent Estimate uses not only the number of bedrooms, but also Property type, Baths and SQFT plus crime rate, school ratings and demographics to identify similar neighborhood comparable properties. (what's that?)

The Rent for a 3 BDR SFH is not the same as 3 BDR Apartment and similarly, a 2000 sqft SFH 3BDR is not the same as a 1500 sqft one, even on the same block. Radius only method to pick-up comps cannot differentiate between a highway dividing an upscale area vs a low income one. That's why human appraisers know what comps to exclude from the same radius.

See how the target property rent compares with the neighborhood, zip code and the city. Is it the steal you were looking for? How safe is the area? Does it have great schools? Is it a walkable neighborhood? See real report here zilpy.com/ri4pwmp71

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Yup, I see this anti-landlord terrible policy in other cities across US. No wonder the very same cities see their property values down and abandoned houses and no property taxes coming in because they destroyed the landlords who collected their loss and moved on. Very basic rule I learned in elementary school, a symbiotic relationship means you never kill your host that feeds you. Property taxes feed the local cities. Not sure what they have in mind (if anything) harassing landlords. On one property I have tenant got fined for example for leaving an empty trashcan on house's own driveway for 2 days cus he left for 1 week and trash collected and left empty can back on driveway.

@Chukwudi Motanya sure thing. I'd love to help.

Yup, pretty much as many stated above, keep off condos, the association can change things over the next years and you are stuck with a mortgage. HOA can skyrocket, rules may be put in place with rentals and you will be turning from happy to angry overnight AND in a bad position to sell to another investor.

Congrats! The hardest thing to do is "Start". After that, just keep the momentum and never stop :)