All Forum Posts by: Henry Lazerow

Project update... @Brian N. absolutely awesome job! Excited to see your many more successful projects :)

Ended up doing some rehab of #G and #1 while owner occupying in #2. Installed granite counter top and managed to save original cabinets, refinished floors, added in unit laundry which I think made a huge difference. New paint, etc. 

Garden 2br 1ba: $1500 just signed lease. Had a $1550 offer but was too far along with the $1500 tenant. 

Unit 1 2br 1ba: $1750 just signed lease. 

It seems like the Class A area of NW Indiana which shouts potential in my head. On the lake front at Whihala Beach is quality new construction single family houses and a well done park. Thinking could be a nice area to do some BRRR's.

Anyone invest in Whiting Indiana 2-4 units? I work heavily in Chicago and am happy to share any info on our local market in return. 

Some questions.....

It appears 4 units are selling 2-3x as high of prices compared to nearby areas such as Hammond. There is very few listings in MLS so not a ton of data to sort through. Are the tenants that much better/rents that much higher? What is considered a good deal for a ready to rent (not rehabbed) 4 unit in Whiting Indiana? Average rents for a nice shape but not newly rehabbed 2br 1ba, 3br 1ba?

What vacancy are you seeing? I assume appreciation will be pretty null at least compared to Chicago class A/B. Anything else should know about this area? I drive through all the time when kiteboarding at Wolf Lake and it's just outside Chicago would like to learn more. 

Feel free to PM.  

Thanks 

Save up and do 3.5% FHA or ideally 5% conventional on a 2-4 unit (conventional PMI falls off naturally and your offer looks stronger so can get better deal). In the mean time keep your eye on all the listings in your target area and get to know the market well. You can also count 75% of rents as income when buying a 2-4 unit so this will give you a bit extra purchase power.

Awesome congrats on the successful deal!

You can also see what the city assessor has it as in regards to # of units. http://cookcountyassessor.com/Search/Property-Sear...

Warning though the assessor is often wrong and the zoning doc trumps what's on there.

@Kevin O'Brien make sure you see the zoning doc before you waste time putting down earnest, negotiating, etc. If the basement bedrooms don't have windows it's a pretty high chance it's an unzoned basement unit all together. 

Buying a turnkey property can be a great way to get started but I would avoid using turnkey services. You make money on the buy in real estate and want a broker who only represents you helping get the property for the lowest price. When you go through a turnkey service you are paying either market rate or often above market rate and the person selling you the property has no reason to help you negotiate for a lower price (its not in their best interest). 

The better solution is to find a market you like. Identify a good broker in that local market and a good property manager (can get recommendations for both of these off BP). Then have the broker find/negotiate you a great deal and once you close immediately put it under the property manager. 

Find a deal that's already rehabbed and ideally stabilized with tenants (there are a ton of these in any major market) and you just got yourself a turnkey deal at the lowest prices. You can also shop property manager rates and remember everything is negotiable in real estate including management rates.  

^ What those wholesalers do is push junk deals 99% of time. They basically cherry pick comps and try to market it as a great deal to a newbie investor who doesn't know any better it makes me sad to see their "scam" advertisements. I am sure some wholesalers have actual deals but that's the majority I have seen at least on the North Side of Chicago maybe in less hot markets like Back of the Yards they have more motivated sellers to make it work. I registered for a bunch of mailings out of curiosity and was overwhelmed by the amount of garbage deals. 

I currently have two Chicago flips under contract sell side with great profit for client and another under contract buy side where the numbers are solid. Strategies to find deals....

1) Find old properties in MLS that were originally over priced. For example originally listed at $800k and dropped it to $775k then $750k then 725k then $700k. By that point everyone has already seen it early on when it wasn't a good deal. Then you go in lowball them offer $625k and get it for $650k. All this on a deal that would of had multiple offers and gone over ask if it was priced at $650k originally. This strategy works I recently had an 800k listed property from 2 months old under contract at 750k then my client broke contract because they got cold feet so the seller relisted it he puts it up as "new" in MLS and guess what it ends up selling 40k higher then we had it under contract at lol

2) Have auto alerts set up and when you see a good deal jump on it fast. Push the broker to accept your offer that day rather then doing a best and highest. A lot of brokers don't like playing games believe it or not and are willing to work to get your offer accepted and be done with the deal quick. 

3) Find ways to do a major value add outside just a rehab. For example adding livable sq ft, adding bedrooms, duplexing an attic. These are things that will make it appraise out on paper higher. Everyone loves pretty kitchens and baths but when you add in closing costs, commissions, carry, etc. it often won't cut it. 

@Syed Lateef I agree repairs/maint. are not properly reflected in the comparison. Those were items directly related to the new rehab anyways. Without those in analysis it increases margin over standard rents. 

@Ray Harrell It's a 3br 2ba coach house. Small house in the rear of a chicago lot where the horses at one point lived. In front is a 2 unit building. 

@Bob Floss II It's a clients they own whole property I can't give out specific rehab financials but will say it was not a cheap build. They used quality materials and the same crew that does 1.8 million single family builds. Overall the current rents got the cap rate well above similar properties in neighborhood for a bit of context. 

I am a HUGE fan of coach houses just did another deal with one and got the pro-forma significantly higher then any other 4 units in area. I also feel like as these coach houses get torn down more and more for new construction there will be less and less of them which may create a rarity/premium from a long term buy and hold standpoint.