All Forum Posts by: Henry Lazerow

If you have $100k to invest skip over the cheap headache markets and go for a major metro class B or better part of city with high demand from qualified renters. For example here in Chicago we have many of these type of neighborhoods that cashflow with solid tenants if buy a 3/4 unit. You will typically need be at $500k+ purchase points but its usually worth it vs buying lower class areas or single families. The 4 units are my favorite and really compound as the rents go up each year, it adds up fast. 

As @James Hamling said need to cut out the middle men. I also cut out the material markup. I think normal contractor mark up materials 30%?

I use cheap contractors/laborers here in Chicago. For example I can gut a basic bathroom paying $3800 labor and I buy materials. Paying a “market rate contractor” would be looking at a 12-15k+ job. It can be hard to really make any money if paying market rate as the cost of repairs will often be over the amount of value they even add in many cases. I just did a roof for $6000 labor + I bought materials, again would be $15k range if called someone reputable off Google. It’s not easy to find good cheap people and took lots of trial and error. I don’t even give out the contacts other than to clients who actually closed a deal with me. I would say hardest part of rentals is finding contractors. I got burned by someone on BP before too who was licensed but still raised price significantly mid project and started trying to bill for every little extra thing he could think of. Best start small project to test people out, see if they perform as said or not. 

I got the 2nd deal 4 years after first and 3rd deal 5 years after first. Was focused a lot on being a realtor have brokered 50 million now but if knew they would appreciate so much probably would have just focused on buying more myself. I find year 3+ of owning is when buildings really stabilized and rents gone up, most won’t really support a refi until 3+ years especially at today’s rates unless got a crazy deal. 

If you’re in a good area just self manage. Here on north side Chicago I even have out of state clients self managing. It’s very easy as tenants pay like clock work electronically and are very reasonable for scheduling repairs. I also have a building though in a low income suburb and that place is 10x the work and I kind of want to find a manager for it. So really depends tenant class. 

Congrats fellow Chicago member! You sound like a very intelligent person and should do good in this. @Jonathan Klemm is a great resource! I would recommend house hacking, it’s easiest way to get started. My first deal was 5% down house hack on a 4 unit and then I used equity from that first deal to do 2 more deals once with a cash out refi and once with heloc. Currently looking for my 4th deal while also working as a realtor helping others. 

What’s brought in business is referrals 90%+ and buyers inquiries to my listings. I paid thousands for flyers and park bench signs before and did not get a single lead from it was huge waste but was kind of cool seeing myself on a bench lol 

Median age of renters. I don’t see any presidential policies changing this trend. 

@Chris Seveney I used to have the same viewpoint back in 2022 when rates rose, I expected a crash of values. My view has changed as prices have not been significantly affected by affordability over the last 2 years, so why would the next 2 years be any different? Supply is the only thing that can lower real estate prices and it’s impossible in most markets to build (add supply) of truly affordable to median income earners with current labor/material costs. I see us becoming more of a country of renters, you can already see this panning out as the average age of renters has increased significantly year over year even when pull data pre covid. 

On another note why is social security/medicare a regressive tax being capped at $168,600, this makes absolutely no sense to me? Couldn’t we just remove this cap while also decreasing the % tax rate which would lower taxes on lower wage workers all while solving the problem of SS running out by increasing the pool of income the tax applies to? I would even go farther and make ss/medicare a flat tax to both income/cap gains at a much lower rate say 5% vs 15.3%. This would also make it cheaper/more competitive to hire American workers vs using foreign labor by lowering the employer paid portion. 

You think if trump picks a pro lower rate fed chair that the 10 year will go up? Why?