All Forum Posts by: David Zhang

Thanks Steven! Luckily it's just a garage and not one of my units. Appreciate the advice!

Hey All! 

I recently renovated the 2 car garage at my building and found some renters on Craigslist. They intended to use it for just storage, so they moved their stuff in for the winter, and won't be back till later next year. Unfortunately, I didn't have them sign a lease or anything, which was definitely my first mistake. I received their first automated payment through Cozy, but then their card failed and I haven't received payments from them for the last two months! I've been trying to call and email them using the info they gave me, but I haven't received any response about the late payments. What can I do?

Regards,

David

Hey Corbin,

Welcome to BP! I'm actually in the beginnings of the same process you're undergoing as well, just in Chicago. I just closed on my first duplex last month, and have both actual units rented out while I'm living in and renovating the (illegal) garden unit. Message me if you're interested in chatting!

A couple words of advice to help you avoid places where I've gotten burned already:

• Trust but verify when going through a house showing, especially your final house inspection before closing. If the seller promised to fix something, make sure its fixed.
• For your first house hack, I would recommend getting a hold of a general contractor you trust, especially if you're planning on renovating the property. I met a guy through my real estate agent, and he's extremely knowledgeable about the market, and what needs to be done to make a unit ready to rent. I have him doing free walkthroughs with me for properties I'm seriously interested in, in exchange for him doing the renovation work once I close on the property.
• As I'm sure you've heard already, treat your house hack like a business. Be firm, but cooperative with your tenants, and make sure you document everything.

Good luck with your adventure! Its hard work, but its satisfying once you get the ball rolling.

Hey Everyone, Thanks so much for your advice.

The tenants seemed like nice people from when I spoke to them briefly at the initial walkthrough, so I am not quite as worried that they will become a huge problem, but I will work towards protecting myself via new leases and changes to the contract.

The mortgage fraud potential is going to be an issue though, one that I hope I can use to scare the existing landlord/listing agent to helping me get the tenants paying again asap, or the offer falls through. I will also be talking to my attorney about this as @Account Closed suggested to see what other options I have. 

Best case scenario I can get the tenants to sign M2M leases and get the paying again, but I'll read up on the eviction process just to be safe.

Hey guys!

I am in the middle of negotiating on a 3 flat with an illegal garden unit. We've agreed on a purchase price and are just about the signed the purchasing agreement. The listing agent mentioned that 3/4 of the units, including the garden unit, are rented out Month to Month with a gross income of 2000. I would really prefer the tenants stay around for a while after the purchase of the property to help pay for the mortgage while I rehab the place. However, I just learned today that the tenant's leases have actually expired, and the tenants are no longer paying rent. The listing agent only said that there was a rental income in order to help me qualify for the loan. 

Is there anything I can do in order to get the tenants back on leases again before closing, so there is some rental income at the start? Should I ask for a credit for some time equal to the amount of rent that would be collected, and then kick the tenants out?

Hi Kendra! 

I will fully admit that Englewood is not the nicest neighborhood to invest in, but the value and potential is definitely there. The area has hit rock bottom since the housing bubble collapse, but that only means there's no where to go but up! I currently live in Chicago, and am actually wrapping up a fix and flip in Englewood with some great margins(for me at least). 

The house was bought for 48k, we put about 90k of repairs into it for a total of 138k, and we put it up on the market for 185k. 2 weeks later, we had it under contract for 182k, for a total gross profit of 44k. Factor in closing costs and some credits to the buyer, and we're looking at at 35k net. Not too bad in the "murder capital of the US"!

Do be warned though, other investors aren't suggesting you shy away for nothing. We had a break-in late December and had about 4k worth of damages, as well as another attempted break-in 2 weeks ago while it was under contract. The area definitely requires someone on site to monitor the apartment and respond to any alarm signals. PM me if you'd like any more information or advice. Good luck with your investments!

Regards,

David

Thanks for your input Steven! I'll send you a PM :) 

Hey guys! I'm on the verge of selling my first Fix and Flip property in February, and will be pursuing a House Hack in the Logan Square/Avondale area during the first half of the year. SInce the Tax ramifications of this are way over my head, if anyone has a referral for a CPA in Chicago that has some experience in real estate, let me know!

Hey BP community,

I'm a new investor looking to start flipping a few houses in the south side of Chicago, around the Auburn Gresham/Chatham area. If there are any real estate agents in the Chicago area that have experience in this area, or if anyone could provide a referral, let me know so I can get in touch. Thanks guys! 

@Logan - Awesome advice, I'll definitely look into it.

@Ned - Totally agree, networking and researching my markets is high up on my to-do list!

@Sean - House Hacking was one of the ways I had hoped to start this journey, so glad to hear that my thinking is on the right track. Meeting up with other investors sounds awesome, I'll drop you a line soon!