All Forum Posts by: Henry Lazerow

Those seem very high estimates ^. My north side Chicago which is class A-/B+ units run on average sub 3% vacancies. Turnovers don’t even need paint most of time. I think it depends a lot on area and price point with $7k monthly rents I rarely spent more then $3-4k a year on cap/ex/maint. I self manage though and just use handmen for repairs.

I agree 100% with @Stuart Udis these turnkey operators and what I would call un-ethical sales people are pushing cashflow numbers that aren't real. I have so many clients who send me their numbers and either unrealistic numbers for rough area properties or its using these large expense ratios that are accurate on a 100k house but not on a 600k multiunit. The % expenses needs to be adjusted in analysis! It goes down as the property price goes up and as the tenant quality goes up. Likewise on a cheap rough area property you need to increase your % for cap/ex, etc. I own both types and the class A way outperforms even though day 1 on paper it looks worse numbers. 

Greater Grand Crossing has some nice pockets. Just remember in Chicago an eviction takes 6-8 months. If area or units aren't good enough to easily attract sec 8 a lot of these rougher area investments turn into huge losses. On southside I like brighton park it's gentrifying and still cashflows on the 4 units.

You can refinace your way to wealth it just won't be as quick as pre-covid days where properties cashflowed at 100 LTV. Now you can cash out every 5-8 years assuming your in a market with growing rents to support the future cashouts. I have done two cash out refis, one of which was last year. It's a great way to scale if don't have a high income to save up and buy more each year.

The cashflow definitely comes more in year 3+ but I still would never suggest clients buy something negative, atleast needs be mildly positive in year 1. I have a north side chicago 4 unit that now is rented $7000 with only a $2950 mortgage. I did a cashout on it in 2021. Rents gone up 7-10% or so a year, it compounds fast. When I bought was like $600s a unit and market was around $1100 a unit. You can map out the likely 3+ year cashflow by using an Excel DCF model that shows expected growth rates of rents, taxes, etc. and spits out your future cashflow numbers. 

@Matt Wan interesting. I wonder what would have happened if you just used a friend/family members US mailing address. There is a lot of conflicting info online in regards to these situations. 

@Nick Belsky these guidelines are for US Citizen living abroad with income on 2255? I don’t see anywhere that the guidelines changed in 2023 it appears foreign income still accepted? What are you calling NPR stand for? 

Most hosts in Chicago just pocket the full funds from direct booking, you would be in the very very small majority if actually paid city taxes on it. I just do all my bookings over airbnb, its too risky to go direct as the guests aren't covered by airbnb insurance. I have had to file claims with airbnb insurance twice and both times airbnb quickly paid out in full. It's worth just sticking in the app. I heard lots of scammers also trying to go off the app and then they say now need to evict me which takes 6-8 months in Chicago. 

Find a good realtor, close a deal with them and they will give you their contractor contacts. Or get work done with a good GC and pick off some subs you meet to do work direct for you. Real life absolutely no one will give away on the internet their investor friendly priced good contractors. Vet anyone you get referred online heavily. 

@Wayne Kerr yes on the north side of Chicago which is where I own properties and work as a realtor the average 3/4 unit is worth 700-1.4 million so actually higher then your $850k mark. The north side appreciates fast, we have seen double digit appreciation/rent growth annually. The numbers you see in population graphs of Chicago include the dying south side neighborhoods, it’s a completely different market. To give a good example I have a clients 3 unit property contingent 1.55 million right now sell side we actually got $150k over on a 1.4 list and appraisal came in yesterday at 1.55 million, he bought it 1.15 million in 2021 and did only new porch/decks over that time. You can google the deals I sell if don’t believe, not going to waste my time responding to you anymore. 

Huh? Definitely not a guru, I invest myself and am a realtor with many repeat clients. What is there not to believe about real estate cash flowing? Few years ago every one talked about cash flow on here, now people just talking about appreciation. I only buy positive cash flow and so do my clients. It’s the only safe way to scale and cash flow is most definitely NOT a myth. That 4 I mentioned was bought 5 years ago. Of course you won’t make 25-35k net in year 1 or 2 but if you buy 3/4 unit buildings in a growing market you can after a few years. Rents go up and mortgage stays the same aka they cash flow more and more the longer you hold even with a mortgage.