All Forum Posts by: Jeff Burdick

@Jeff Burdick Nice. Can I ask which lender you used? I went with Guaranteed Rate initially and they wouldn't even let me owner occupy a multi-unit without 20% down unless I went with FHA.

Thanks for the responses everyone!

I'm in Little Village (northeast side of the neighborhood) near the California Pink Line. I'm sandwiched between that and the Pete's Fresh Market at Rockwell and Cermak. Unfortunately, there's no vacant space. I have one of those Pilsen-style 2 flats where it's "sunken" below street level and there's only about 3 feet of height in a crawlspace below the first unit. I'm adding value slowly paying out of pocket with my W2 income, but I don't think I'd be able to hit 80% LTV yet to get out since I've only been here 6 months and the principal hasn't gone down much.

Yeah. I'm so not digging high property taxes. It's not uncommon to pay 10k+/yr for a duplex or three flat here (Chicago and 'burbs)

Long time reader, first post. 

I recently graduated with an enormous amount of debt (>150,000). This is causing my debt/income ratio to be too great for many traditional lenders. I currently generate $3,200/month with student loans equaling about $1,600 of that. That is my only debt currently. I currently have $12,000 to put down on a house and access to ~$30,000 from my dad who is partnering with me. If it helps, I am in the metro Detroit area and looking to invest in SE Oakland county.

I am starting to think my options are a private investor (hard finding reputable companies to loan for my first flip) or a hard money lender.

Any advice on how I should proceed to secure finances would be greatly appreciated

And what area do you live in? There's a huge difference in the city of Chicago when you talk about the north side versus the south or west side. But to suggest cook county is great for buy and hold investing is terrible advice - whether you have "pride in your city" or not.

And no matter how you cut it, I would never tell anyone to invest in the area. You have a state that hasn't had a budget in two years now and whose pension shortfall is the worst in the country. A county and city who have more pension shortfalls.  

I am actually shocked at how low your taxes are. No wonder the city is in such dire straits - the suburbs are the ones paying all the taxes.  Any other collar county is, for the most part, paying a minimum of 3% and many are closer to 4%. Apparently, some of the areas in the city aren't paying their fair share. But I bet you won't be paying 1.5% too much longer. Have you seen what your new tax bill AFTER the most recent tax hike will be in effect? And there are more coming.

Did you see this article in today's Tribune? 

Ratings agency says big tax hike is 'most likely' CPS fix

http://www.chicagotribune.com/news/local/politics/...

The tab on Emanuel's series of tax hikes: $1,700 a year for average family
http://www.chicagotribune.com/news/local/politics/...

For anybody looking to invest in an area, the last thing you would EVER want to do is pick an area where people are moving out. Crime is out of control.  Trump has even mentioned possibly sending in the National Guard to the city of Chicago.   

Here is a recent article: Does that look like a trend of an area you want to recommend someone go into?

More than 750 people have been murdered in Chicago in 2016, the police said, a 58 percent increase over last year and the highest total since 1997. There have been more than 3,500 shootings in the city this year. Over Christmas weekend, at least 60 people were shot, 11 fatally, according to The Chicago Tribune.Dec 28, 2016

Its not getting better either - its getting worse. 

So again, I'm not sure why in the world anyone would suggest Chicago as a good place to invest. Not unless you're talking about the northern suburbs. Even that, buyer beware. Significant tax increases have just been passed so don't just look at last year's tax rate - look at the taxes that are going to be paid going forward with the new rate.  And there are likely several more on the way (both for the city and the state). 

This state is in awful shape. The fact that you don't seem to be concerned that our state hasn't had a budget in two years is mind boggling. Or the fact that we are billions short on our pension liabilities. That money has to come from somewhere and its going to be in the form of taxes. 

Companies are NOT moving into Illinois. They're moving out. The taxes here are beyond onerous to many of our neighbors like indiana and the like. Too many liberals that were in bed with the unions and promised ridiculous benefits that we simply can't afford.  And now the bill has finally come due. 

Hey Fellow BP Colleagues,

I plan to double on Chicago with my third investment there.  Any reason not to do so before I take the plunge?  Thanks for your insights in advance.

Thanks Mark Nolan, the Podcast are basically all I have been doing so far on site. I've been trying to listen to one a day and I love them. Do you have a favorite podcast? This is first time I am in the forum and I am trying to find other good resources on site.

John Casmon, there is absolutely more room for growth in Logan Square and Avondale and a lot of investors are moving/imvestkng even more north along blue line. The big jump in value happened about 2 years ago when the 606 broke ground but there are still SFH and Multi units that need rehab. And most importantly, there are more projects getting approved and and more opportunity to build. I feel that there will always be a room for growth until the CPS schools are top rated. The schools are always a good indication that the neighborhood is now at top value because they take a little bit to catch up with the neighborhood. The trick is being creative on how you find the investments. Hermosa- I've been seeing grown from last year to this year. It's really block by block but I think if I invested in that area it would be by a metes. Transportation is important to most in city and good for resale and tenants. Let me know if you want me to keep an eye out for you. Feel free to contact me.

Trexie Eusebio-thanks for the tip. I'll start connecting with people.  

@Jeff Burdick

I am not familiar with chicago property tax rates. But I can tell you that cook county tax rates are some of the worst in the state and country. I can also tell you that Illinois has the 2nd highest tax rate of any state in the country (next to new jersey).

I have several properties in Cook County. There isn't anything close to 1.51% of a tax rate.
Again, maybe the northside of chicago/cook county is different. But he was asking about southside suburbs.
And here are the numbers I'm seeing:
5120 Roberta ln, richton park - Assessed value= 116,080, Property Taxes=$6,077.49: TAX RATE = 5.2%
29538 Lake shore, lynwood - Assessed value=129810, Property taxes =$5480.05 TAX RATE =4.2%
22413 plum creek, sauk village - *** value - 151,030, Taxes=6032.32 RATE=3.9%

If you think cook county property taxes are 1.5%, I'd love to see you find me a single town whose
tax rate is 1.5%.  Maybe in the 600k and above price range I guess. But not in the "investor" areas of 100k to 200k price range.  And if you think kankakee county is 1.9%, you're also completely misinformed. I have no idea where those reports are getting their numbers but I can tell you that nobody down here is paying 1.9%.  

I have homes in bourbonnais, bradley, manteno and one in aroma park. And 3% is about the best you're going to see. Kankakee itself is closer to 5%!

So before you pull canned reports and pass them off as fact, you need to actually check some real numbers against them. The one fact that I would support is that Illinois is reported to have the 2nd highest property tax rate in the entire country (next to new jersey).  Thats one that I would be likely to believe.  

In terms of murder rate, again, I don't know what you're reading but Chicago's escalating murder rate is driving people out of the city in full force. The Tribune has a murder/shooting tally on the front page every day now. If the south and west side of chicago doesn't have the worst murder/shooting rate of anyone in the county right now, I'd be shocked.  Maybe you're pulling reports again that are 3 years old.  Here's something from april of 2016. And its gotten much, much worse over the last 10 mos. Either your head is in the sand or you've got some ulterior motive by saying its not violent here.

CHICAGO — Murders in the nation's third-largest city are up about 72%, while shootings have surged more than 88% in the first three months of 2016 compared with the same period last year, according to data released Friday by the ChicagoPolice Department.Apr 1, 2016

And in terms of population loss, holy cow, you are simply lost. But you must not be reading the tribune regularly where they actually give you real up to date FACTS. There is a huge population drain occurring in chicago. 

Chicago area sees greatest population loss of any major U.S. city, region in 2015

Did you read this article?  That was in 2015. I guarantee you 2016 was far worse. The shootings/killings are completely out of control. I have people calling me from the city asking about my rentals down here. They literally just went out.

And the real hit of the city's pension shortfall is going to mean even more tax increases. 

Keep in mind, the city just recently passed one of the biggest property tax increases in its history. So I guarantee you that isn't showing up in any one of your reports. 

Pulling data thats 2 and 3 years old doesn't tell the story. If you don't see there being huge problems in the city and cook county along with the state itself, you're simply not well informed. If I was an investor looking to invest out of state, the one area I would tell people not to invest in is Illinois. Cook County in particular for buy and hold. Not only do you have all the pending tax issues from the city, county and state (the state is billions in arrears on payments and in a bind on their pensions too in case you weren't aware). But you have the crazy crime and outflow of population. And then you have some of the worst landlord laws in the country (evictions in cook county can take 4 to 6 mos minimum).

Why in the world would you ever tell someone that things are great here? If you live here, then you make the best of it. But for someone considering out of state investing in an area, to suggest the state/county/city are a good idea is pure insanity.