All Forum Posts by: Bob Floss II

@Conrad Kostrzewa It's not a bad plan but I don't think West Loop will work. You need a condo with a low monthly assessment and West Loop doesn't have many options.  The assessment is one of the biggest obstacles to keep condos from cash flowing as a rental. You can go down to South Loop, up to River North, or slide over to Humboldt Parka and Logan Square to find something that will work for your model.

Great opportunity for investor to fix and flip in Elgin.  Property is 4 bedrooms, 2.1 baths in need of full cosmetic rehab.  Comps suggest a sale price of $300,000 when completed and properties in this neighborhood move fast.  Perfect for a contractor that wants to make some sweat equity.

@Elias Betondo When looking at those comps, pay attention to the CAP. It sounds like you'll lose some value based on the speculative nature of the properties that can be converted to single family homes. However, if market your property with a more attractive CAP than the neighboring properties you should be able to attract in investor.

@Calvin Lipscomb @Ronan M. I wanted to point out Ronan put you on the right track by requesting the T12 or Trailing 12 months. Some lenders, but not all, will want to see this for underwriting. It's also a very nice document for you to review. Essentially you are asking the seller to report on the actual rent collected and expenses for each of the previous 12 months on the building. Typically you'll get an excel spreadsheet and it gives you an opportunity to see how the building is really performing.

@Scott Skinger @Calvin Lipscomb Unfortunately, violent crimes are a regularity in these areas. Scott gave you a very important piece of advice, which is go block-by-block. When looking at a building, we always take a look at the neighboring buildings and blocks as a whole. If you can't physically visit, google maps street view can give you a rough idea. I've been through buildings with great opportunity but the block looks like a war zone and you'll never attract good tenants.  

CAP rate really depends upon if you are looking for stabilized buildings or if you are in a position for value add. If you are looking for a stabilized rent 7 CAP building, you might be able to move into Woodlawn and get a better building.

@Calvin Lipscomb Sorry to hear about your issue. I've been working with an investor buying properties in south shore for several years and the market has changed dramatically.  We initially had little trouble putting buildings under contract and now we have to work almost exclusively through off market offerings. I don't mind it, but I've found the sellers want their price and don't give much room to negotiate. It's resulted in some unrealistic expectations for pricing. 

@Kat Malkowski You can use your 401K as proof of funds to get the deal under contract and immediately begin getting approval from a hard money source.  I've also worked with lenders that don't mind reviewing a deal before you put it under contract to give you a preapproval for that project. There are several companies that want more exposure to investors that want to flip homes.  

Some properties in Chicago are non-metered, meaning the water bill does not reflect actual water usage.  The water bill is estimated based on anticipated usage.  I have yet to see someone successfully challenge a non-metered bill.  

Is the buyer going to get a new mortgage or do an assumption of mortgage? If they only sell the equity portion and leave the existing mortgage, the transfer on title could trigger an automatic default by the lender.  

@Erin Caldwell Good luck with your search, I'd recommend using an agent so you don't miss out on properties not on the MLS.