All Forum Posts by: Elbert D.

@Natasha Richardson your definitely not going find a turnkey MFH that cash flows in chicago. Why is that? Well from my experience from just looking at the MLS for the past year and a half anything that is rehabbed on the MLS that is a MFH is usually overpriced. Running the numbers on these houses I seen, the cash on cash return sucks at around 2-5%. If you truly want a cash flowing MFH your going have to look off market and hopefully the seller is willing to go down in price(because many sellers are asking for market value for their properties) and you can pick up a MFH for less than 50k(roughly) in a decent area. Depending on the number of units the rehab is going be kinda pricey if done right by a decent general contractor and handy men. The bathroom and kitchen of course are going probably need the most work excluding the HVaC and windows. Which are usually not well kept in MFHs. Basically your going have to spend money on rehab. Don't let any of these crooks try to con you of money and make them stick to a schedule. It's really hard to find people that do good work and stick to a schedule, it's a few out there that take their business serious.

Another solution is to consider moving to northwest Indiana. There is some good areas that cash flow well and the landlord laws are much less liberal compared to Illinois. Not sure where in Chicago you work but Indiana is just another idea to think about. If you want to explore options obtaining a MFH.  Hopefully in 2019 more balance will be restored to market everywhere.

Congrats.....great to hear about how you turned your lump of coal into a diamond.....now what are you going do with the 1.5 mil? Also Im sure there was a hold on your bank account LOL! probbaly took 10 days to "verify" the funds and money. 

@J Scott You have said a lot and I agree with most of what your saying.

@Enyi Ajoku Im not sure if your completely new to real estate or not. But this industry will literally eat you alive. Its a reason why its known as one of the most shady industries(You can probably make a point for the banking and medical industry as well). People will screw you in a quick second and not think nothing of it. Also people lie so much about rehab from contractors, realtors, original owners, banks, HUD. What J Scott is saying in nicer terms than what I have just said is 100% true. Hes telling you that you shouldnt pay your contractor for his labor services then turn around give him a portion of your profits from the fix and flip. Now, if you want you could tip him if you think he did a very good job to keep him around and to put the thought into his head that you have work for him.

By the way, have you seen the general contractor work before? not just pictures but in person to? Is he good with deadlines?(very important) does he keep up with his receipts? Do you know all your closing cost numbers? realtor cost for listing? Make sure you have all your numbers in order, you dont want any surprises at close. Me personally even though I am not new to real estate we all make mistakes. Here in Chicago I made a mistake on a close and forgot a couple of things and so expecting a certain profit and getting less is very disappointing. No matter if its a wholesale deal or fix and flip deal. 

Best of luck to you and let me know if you need any help.

What neighborhood is this? The numbers look ok. Whats the price? Any rehab needed? I never seen or have been to anything that didnt need a little rehab.

It depends how fast you plan on scaling. Your DTI still cant be too high. I would say do a combination of Hard money loans and private money loans then Refi to the credit union and local bank terms. Also research the BRRR stragety since you are planning on acquiring rentals. Good luck with being a landlord.

Real estate is all about building relationships........

It depends on the realtor. Many realtors dont have a clue about what really goes on with the investing and business side of real estate. Many realtors prefer to stick with the retail side of things because well.....things are much eaiser that way. And thats fine. Everything is taught out the book. With the business and investment side of things you have to learn how those things work by experience and or shadowing a much more experience realtor.

What a realtor can do for a wholesaler:

• provide accurate and solid sold comps
• submit contracts on the MLS on wholesalers behalf
• help them with access to properties(trust is needed for this)
• Feed them leads if they dont have a buyer themselves and get compensated for it

What a wholesaler can give a realtor:

• Give a lead to a realtor if they dont have a buyer or need help moving the house
• If closing on a property and the wholesalers buyer is flipping the property the realtor can list the property as the selling real estate agent

I could name a few more but I choose not to lol. Its ways for many people to partner up to accomplish things within this industry. I can understand why many realtors dont like dealing with wholesalers. Many of them dont know what they are doing. On the flip side, from my experience neither does many realtors......

As @J Scott mentioned you dont seem to know what to do let alone start. You need to ask them more questions. Way more questions.

I also would like to know if you have reliable contractors and a handy man???? Because if you dont know any your in big trouble. Getting any Joe blow will get you smoked. If you dont know already there are many scammers and crooks in the real estate industry.

You mentioned the Baltimore market and you knowing it very well so you should know what areas and certain pockets of the city are rental areas, flipping areas and some areas that are both. I would for sure get ahold of some reliable licensed insured and bonded contractors who are knowledgeable and can provide you with previous work experience and call atleast 5-7 references. Also see if they are good with time management because many of them arent. 

Best of luck to you.

I think many people have the misconception of education. Because technically you can obtain education in various way. Well......before there was institutional education. How did people become educated????? A “master” is how they did it. Unfortunately nowadays there aren’t many good teachers(at least in my experience) because many teachers wouldn’t teach if they could do something else. They also aren’t paid very good. I’m sure there are exceptions but as the saying goes those who can, do(execute) and those who can’t, teach. Hell, look at all these real estate gurus popping up everywhere.......anyway there are many ways to learn. In my opinion the best teacher is failure and life experiences. Something you can’t get in school. Your looked at as an idiot in school. 

Let’s dive into this a bit more. School actually can’t keep up with the ever growing job market......there’s a reason why employers ask for students coming out of HS and college to have something more....why? Because your entering the labor market. MARKET......meaning that your competing with a ton of other people for these limited jobs. The “buyer” is the employers you applying for to give your time and labor. What can you provide to the company other than showing them a piece of paper? Many people still don’t understand that. Your conducting business everytime you sign your name on anything......

It all started with Wikipedia....Schools are fighting the internet disrupting their market share on education. With repeated practice you can become very good at almost anything thanks to the internet at a much significant price reduction(it’s a lot of misinformation out here but you have to sort though it) that’s why government is attempting to put restrictions on the usage of internet(LOL). 

In a way the way how school is exactly now......I really don’t see why this outdated model is still being pushed and marketed to mainstream America. Everyone going through K-12 is learning pretty much the same as the next person. At least here in America they are.  The cost just doesn’t outweigh the benefits when almost everything I personally looked up to get assignments done in college was with YouTube and Google. Why is education is so expensive yet....it doesn’t get much funding?

On the other side. What school/college can potentially do is give you baseline to survive in the world today. So although interviews are not in your control, if hired atleast you know you will be able to survive everyday. A weekly paycheck is comfortable for most people. 

That’s how school should be looked at and only...... To get a job that will allow me to survive. Because the way how many jobs are being eliminated every month due to automation and companies choosing to phase out certain jobs to reduce expenses.....I wouldn’t be looking to living a high lifestyle with just a job. No matter the job...No one should be looking at having a job the rest of their lives as a pat on the back. Especially with things that people hope to get when they retire being in trouble(social security, pensions....etc) 

To survive in the world today you can only  be 4 things.....

1. Business owner/ property owner/ owner of things of value(Intellectual property)

2. Employee

3. On government assistance

4. Rob and steal to survive

It’s literally no other way to survive in the world......you pick which lane you want to be in or you aspire to become. 

For the most part these are my opinions but there are some things I said which are facts. 

@Nimrod Bar tor

The people who work for the government are increasing taxes so people are funding their increases in salaries. If you look at almost any industry its always the government jobs that get paid the most. Thats where taxes are going. Its sad to see the Illinois economy go down this way........I guess to rebuild it must be destroyed. There are still some good deals to be found and ways to make money as a landlord owner. It is becoming more harder though. 

To me in my opinion I think its becoming obvious the "building a new Chicago" signs are meaning for the general population.......

Anyway. The requirements when looking for holding properties in a state are:

1. The real estate laws and regulations

2. The surrounding real estate in the area your looking

3. Average Cash on Cash return and CAP rate

4. Competent Property Management 

Indiana is definitely one of the states I would look into if I were you.....

@Joel Ortiz I just sent you a message on the Illinois and Indiana markets for renting properties. I dont want to get flagged lol.