All Forum Posts by: Henry Lazerow

What software is your favorite? 

Thanks. Yes, the 4th unit is where owner lived so I am going to live in that one. 

I know someone who did this and it ended up in disaster. The tenants were all college kids/young professionals and would just move out with no notice when there was conflicts between roommates. Stuff happens like one person wants to study the other is too loud, someone leaves kitchen dirty, etc. 

Since it's just a room rental no one was willing to sue each other over such a small amount so landlord would just have to take a loss over and over again. I think airbnb is the only way to go when doing this. 

I have an Excel model that spits out cash on cash return and yield (includes mortgage paydown) both come out with a significantly higher rate of return on a 30 year then a 15 year. As long as tenants paying mortgage not you it doesn't matter how much interest is payed.

On the under 1 million 5+ buildings Wells Fargo has some cool programs and they do not care if it's your first one. 

Awesome turnaround. Congrats!

Just closed this personal acquisition and happy to share the deal progress on here as I rehab the units, etc. I bought it off the MLS for $425,000 with a $12,500 closing credit = $412,500 net using the 5% down Home Possible Program. All four units are 2br's I estimate my top two units will rent $1050-1100 each (mild renovations) and the rehabbed bottom two units $1200-1250 each. Bringing gross rents to $4500-4700. Very high cashflow!

My rehab budget is $52,000 just using cash vs rehab loan as much easier/was a stronger offer this way. Scope of work: Adding in unit laundry to all 4 units. Bottom two units doing new gutted kitchens/bathrooms, paint, new stainless-steel appliances. The top two units are in ok shape and I plan to just do new paint, re-glaze the tubs/sink, put in nice wall tiles on kitchen/bath backdrops doing work myself to save money.

Something I always like to point out to investors when searching for properties is that a lot of MLS buyers don't view these 2-4 units as much for cashflow and actually passed on this one because the units are small/dated but from my experience these size units have an even stronger demand when priced cheaper than market average rents. I ran a tester advertisement using low quality photos with a dirty dish filled kitchen and marked up walls at $1050 saying in unit laundry and being a 2br in that neighborhood got 7 replies within 5 hours on HotPads. This is only .6 miles west of Loyola's campus. I may try out AIRBNB for one of the units also.

The bad: The tenants have all been there for 8-15 years and are only paying $595 a month per a unit…I know crazy right! The owner was a very nice elderly man and did not want them to get kicked out right away with the under-market rents so he let them all sign a 1 year lease ending 5/1/2020. This will potentially delay a lot of the rehabbing but I am going to try offering the tenants $500 cash to break their leases early.

Back to the 60's 

Happy investing everyone!!!

Awesome keep it up! We are seeing similar rapid growth in the gentrifying Chicago neighborhoods right now 

Chicago neighborhoods seeing strong gentrification (in no particular order).....

Avondale, West Logan Square, Hermosa, Humboldt Park (North of North Ave. or between Western Ave. and California Ave.), Albany Park, Irving Park, Rogers Park, West Edgewater, Pilsen/Heart of Chicago, Little Village, Mckinley Park, Bridgeport, East Woodlawn (east of cottage grove) and Bronzeville. 

In Chicago we ask for a closing cost credit nearly 100% of the time with 2-4 units. But we go in $10k higher then what would of normally offered and then ask for a $10K seller closing cost credit so the seller still nets out the same. 

The trick is you need to call list agent and explain to them what it is so they don't get confused. I also like to send a bank statement showing my client has more then the cash for downpayment in the bank so sellers agent knows they are a strong buyer and just doing this credit to maximize their % return.