All Forum Posts by: Christopher V.

Hey everyone,

Have any of you ever had experiences building a duplex/triplex from the ground up on vacant land? I currently own a piece of land near downtown Chicago and am wondering if the best route to go would be to eventually build something on it. Just curious of what your experiences were? How'd you find your developer/builder? How much did it run you (just a ballpark, I know it varies by area)? Any other advice would be welcomed.

Thanks,

Chris

@Jeff Stephens Thanks so much for your response. You bring up a lot of good questions and hopefully I can address them all.

The seller is a gentleman in his 60's whom owns this lot in a trust with his wife. They purchased it free and clear in 1999 for $12,000. The property taxes have been roughly $800 per year. Therefore, he's roughly $26,500 all into this property. I'm not quite sure why he bought it to begin with, I haven't asked him that yet as I feel that's a bit intrusive (maybe I'm wrong?). However, I assume it's because this is an area of Chicago that is supposed to have appreciated a long time ago. It's barely NOW showing signs of life.

I would love to have the owner finance the property for me, however, I haven't asked yet because I just assumed since the gentlemen is in the later stages of his life, he wouldn't want to carry a loan and would prefer the cash up front. However, I may be assuming wrong and will definitely talk to him about it. I just wanted to make sure to be able to line up my own financing in case he says no.

At this point in time, I'm not really looking to partner with anyone because I don't want to have any pressures on me regarding expectations with this lot. There is new construction happening on the block already and it's very well located near major public transportation. My vision is to hold this property and let the area appreciate a bit and have the new construction sell so that I can have some direct comps should I decide to build. The goal would be to build a 3 flat on this property in the next 5 years and then hold it as a rental property.

That being said, I wouldn't mind carrying debt right now. Ideally in the perfect world, I'd be able to finance this lot over the next 5 years and pay it off faster than that hopefully.

If I could wave a magic wand, I'd have someone lend me $50,000 for anywhere from 2-5 years in length for a fixed interest rate.

Hope this all helps!

Thanks,

Chris

Hey BP community,

Hoping someone in here can throw some advice my way. I'm looking to purchase a vacant lot and I'm struggling to think of ways to obtain creative fianancing. Details:

Price: $65,000

Cash available for down payment: up to $20,000

Zoning: Residential

Plans: hold it with plans to potentially build on it within the next 5 years.

Additional info: lot is currently located between two duplexes.

Any advice would be greatly appreciated. Thanks in advanced!

-Chris

@Nate Sunday if the property is still available, please email the details to [email protected]. Thanks!

All,

I truly appreciate all your comments. This is why I love BP, everyone is straight shooter. The only reason I considered getting into a negative cash-flow property is because of its location and what's coming to it's area. McDonalds HQ is coming a couple blocks away in Spring 2018. I figured if I was able to get a signed 2 year lease in hand then someone else would be paying my mortgage for 2 years and building me equity. Then hopefully the market would keep appreciating (I know this is major wishful thinking) but the building has been doing great thus far. Then I could just sell after a quick turnaround and get a decent ROI.

However, on further thought, you guys are all right, I should just get into a positive cash-flow situation if I'm going to do anything at all.

Thanks again!

Hello all,

I'm looking at a potential purchase and would like your advice or second opinion. I feel like I may not be taking something into account.

Price: $300,000
Property Type: Condo
HOA Fees: $400/month
Property Taxes: $2,200/year
Home Owners Insurance: $800/year (estimated)
PMI: $133/month (estimated)

Estimated Monthly Payments all in: $2,109.00

My brother and I are considering purchasing this place simply because there are currently tenants in there renting for $2,050.00 per month through July 31, 2017. They want to extend their lease another two years according to the agent. In my head, we'd have someone living there for another 2 years and paying $49,200 of the mortgage while we pay the small difference. Add in our down payment of 10% and at the end of year 2 we have $79,200 in equity built into the place. We're thinking at that point we just sell it and take our small earnings.

That is not considering any kind of market appreciation. But I also know that's not accounting for any unforeseen market swings as well (say the market crashes, we can afford to hold onto the place for years to come).

Does anyone see any flaw in my logic? Also, does anyone have experience doing this (buying and holding with zero renovations)?

Thank you in advance,

Chris

Jason Bott fantastic insight. Thanks for taking the time to share that with me. I've definitely learned something new thanks to this thread.

Syed Lateef good to hear! Thanks for sharing. Do you mind me asking what you're getting for rent in your units? 2 bed/1 bath?

@Syed Lateef appreciate the info! How's that unit in Jefferson worked out for you btw? Cash flow positive? Anything you can tell me about the neighborhood?

Aaron Vaughn it's a duplex with a finished basement. It's been recently flipped. The goal is to have my fiancé and I live in the basement if possible and then rent the other two units out. I'm just trying to gather as much info as possible about related costs so I can run the numbers and see if it works.