All Forum Posts by: Josh Sexton

Welcome to Chicago!  I hope you get to have some fun downtown this summer.

Our properties are ready for an "armchair investor" who wants to earn positive monthly cash flow.

This 3 bed/1 bath bungalow in Chicago was just purchased and our construction team with be finished with rehabbing it in the next couple weeks. It will come with designer finishes and an updated interior, targeted to market demand. This unit will be fully permitted and inspected by the city of Chicago. Once rehabbed, our full service property management team will be screening tenants and coordinating maintenance and any repairs as they arise.

Check out the pro forma at www.gslowinvestments.com.

345 W 102nd St, Chicago, IL

Monthly Rent: $1250

Net Investment: $120,600

Capitalization Rate: 8.22%

You need to consider the expenses too. Here's an example. Cap rate makes the assumption that you own the property without any debt.  In other words, payments on the principal and interest of a loan are not included.

Our properties are ready for an "armchair investor" who wants to earn positive monthly cash flow.

This 3 bed/2.5 bath bungalow in Chicago was just rented and is now income ready.  It comes with designer finishes and has been fully rehabbed by out construction team.  This unit is fully permitted and inspected by the city of Chicago and comes with a 1 year builder's warranty.  Our full service property management team already screened the tenant and is coordinating maintenance and any repairs as they arise.

www.gslowinvestments.com

8403 S Aberdeen, Chicago, IL 60620

Monthly Rent: $1470

Net Investment: $153,900

Capitalization Rate: 8.06%

I approach it a bit differently and don't always abide by the 70% rule for a buy and hold property, as long as it is in good condition.  Rather, I look at what comparable homes in the area are selling for once they are fixed up and look decent.  I also look at what market rent is in the area.  From that, I figure my capitalization rate.  As long as it's higher than 7% or so, I know I can make money.  Some people prefer to look at cash flow and make sure you're able to make $200 a unit once mortgage and expenses are accounted for.

I know it can seem impossible to find a good deal sometimes, especially in a market that is moving as quickly as Houston.  Keep putting offers in.  If it's 10, 20, 30 offers a week, so be it.  Go ahead and low-ball people.  I've seen some accepted offers that are WAY below asking price.  Keep a positive attitude and eventually it will pay off.  Happy hunting!

It depends on the quality of the property. Typically flips are value-added investments where you do a minor (or full gut) rehab to add equity. You can purchase buy and hold properties that are much more expensive if they need significantly less work to get them ready to rent. When you're ready to exit your investment and sell the SFH, having a quality unit will go a long way to minimizing any costs associated with getting it ready to sell.

Thanks for the encouragement!  If you have any questions before I update the website next, you're welcome to message me or send me an email.

I need your advice.

If you've been following my posts in the Marketplace, you already know that we recently went live with our investments website. We've been getting a ton of good feedback and I'm noticing several leads come in from potential buyers living overseas. I think it would be a good idea if I included a REI 101 page on the site that would serve as a primer for those who may not be familiar with REI basics.

So, what should I include on the page?

I don't want to publish a book on the matter and am hoping to keep the information light and easy to understand.  Just the main concepts of investing and what to look for when evaluating a deal.

What do you think would be best to include?

What do you wish you had known before you made your first deal?

@Cliff Mccue Is right.  Our properties are all rehabbed (or had a "lipstick" rehab done on a property that was already in good shape).  If this unit is dated and needs $10-20k of work done, $55-65k might be the right offer.

You really need to look at comparable properties in that area.  The problem with valuing homes on the South Side is that are are pockets of really nice homes and pockets of really bad homes.  Also, you mentioned that this is a turnkey property which I assume means that everything is finished and rent ready.  This will obviously affect the price, as nice homes go for more than beat up homes.  

Do you have access to the MLS so you can look at comps? I don't know if it's helpful but I have a ton of properties up on my page that you may be able to use as a guideline for pricing. We run comparative market analyses on all our units so they come in at market value. If any of these properties are near where the one you're looking at is, the value should be pretty similar.

For what it's worth, a good quality, finished property on the South Side will generally be valued over $100k (depending on size and bed/bath count).