All Forum Posts by: Ibn Abney

@Jose Torres With this amount of cash, equity, and credit score you can get any type of loan product from any bank. You can even skip the bank loan and be the bank with that much equity and cash. 

If i was you, I would skip the SFH and move straight into apartments or at least 5-12 unit properties. or partner with other folks and go after a larger complex.

my 2 cents... good luck

@Eric Waterman 30% for V/PM/M does seem a bit high. I would be around 20%-23%.

However, you are on point. Not sure if the rents can be increased? Any parking or laundry income? Also, not sure what the average  cap rate for this market, so hard to say its a deal or not.

I would have countered with comps in hand. 

When comparing to deals in my areas, I would definitely say pass. Much greener grass out there.

@Michelle Bright Good question. Hoping to learn something here.

One easy way is to sign up for newsletters from the local alderman for your ward!! go to alderman events for your ward as well. 

There is a BP podcast about a lady in denver who built a portfolio of condos in Denver due to the high cost of entry (https://www.biggerpockets.com/renewsblog/2016/07/14/bp-podcast-183achieving-financial-independence-rental-properties-sarah-pritchett/) . 

I think condos are the same as houses in rural areas and/or the country. Low appreaciation yet high cash flow. But being in Chicago, there is much more appreaciation than Ohio or Alabama.

Long term I don't see it going more than 10 units, buts 10 condo units that cash flow and provide tax advantages is better in my mind, then waiting to buy a duplex ever 2-3 years (saving for down payments). If you build enough equity and cash flow in condos, it does provide an option to move into large properties or apartments.

@Stefanie K. my lender does non-warrantable  condo loans. That what you will need here. PM for details if still needed.

thanks,

Cash on Cash is about 5.5-6% if my math is correct. about a 6% cap rate. (assuming 25% down).

I think that is low for west side of Chicago. Even though EGP is up and coming. Even if you increase that 2nd unit from $750 to $1000, doesn't seem to cash flow that great after maintenance/vacancy (i used 15% in my modeling).

my 2 cents. good luck! 

I am considering increasing my home insurance deductible from $1500K to $4000K. Will save me about 37% annually from the quotes i received. 

My thought is most damage will fall under that $1500K #. If a major event does occur (ex: fire), then what is $4000K when something so drastic happens?

Just curios what more season investors are doing? The units are not in a LLC/legal entity and are in an urban area (C+ to B-) area.

thanks,

@Sean McDonnell is 100% correct. 3 main issues below. Condos can cashflow well if you are willing to work around the issues below. 

1) main issue is financing based on lender requirements

2) Ensure the HOA has enough reserves on hand and isnt planning any major reapirs/purchases

3) Ensure the HOA allows rentals and does not have a rental cap

@Christian Cody Financing costs are specific to the owner/investor and as such are not included in calculating NOI.

the mortgage debt is not in that $20K #