All Forum Posts by: Jim Gramata

As stated above you cannot terminate the lease however as you said you can negotiate to cancel it with them directly which is very likely to work through simply explaining to them the situation. If you help them find a place or give them a months rent free for the inconvenience you  may be able to get back in yourself. 

There is a slim chance your lease is not written with Chicago rental criteria however I believe regardless of your lease the Chicago laws will supersede your lease. Tenants rights are really in the favor of the tenant here in Chicago. 

Again, be nice to them and talk to them and get it done that way. Don't mention the lease or the terms in the lease at all. That will most likely backfire. 

Brie's comment about putting them on a month to month lease would only be possible after this current lease expires. In fact, you would not need to sign a new lease in order to get a month to month lease in place. Simply by accepting the rental check for the follow month (or months) after a lease expires is an extension of the lease (for 30 days).But that is another topic for another post. Again I don't think this will apply to your case. 

Be civil with them, You know... "old school " and you should be fine. Unless the start reading the lease and tenant rights. Then your SCREWED :)

All investors know the projection of rents (income) is a critical piece to a property analysis and valuation. It is easier in occupied MU properties but how about vacant or an under rented unit or units (the more likely kind most smaller scale investors would encounter)?

How do you get your rental projections for properties you're considering purchasing? I have access to the MLS so clearly going to a broker is one solid route but few brokers know both the rental market and resale markets well in my experience (some do but not most).

I came across this site that offers great general insight into the US rental market in larger cities. 

https://livelovely.com/reports/q32014

It has value but not enough to get what I call Level 2 or Level 1 data - the information most like and in proximity to the subject. The above report is a Level 7 which shows general trends (here in Chicago for example the info is pretty accurate generally). 

I find it helpful to search general trend reports like these for comparing one neighborhoods general rents to another and then cross referencing this with their median sales prices. Obviously if you can get on average more rent in an area where properties are selling for less you will get better ROI.

This site is pretty good too

http://www.rentjungle.com/average-rent-in-chicago-...

For those interested in the Chicago rental market (we are in Cook County) here is a great Rental Market report done by DePaul U. Check out graph 3 and look at the bubble in the loop/downtown rentals created mostly by the fact lenders are only financing new rental high rise towers (not condos). The numbers have only worked with rental projections not condo pricing. 

https://www.evernote.com/l/ACum5C-oplxEWplRWEBEXy6fOuC0-AR8pME

So, aside from experience and a local broker who knows their stuff can you share any Level 1 or 2 resources, websites or methods you use to measure rental pricing and trends to prepare realistic proformas? 

Thanks in advance. 

First step: determine your unbelievably unrealistic 10 year, 5 year and 1 year goals. I mean set the bar high. Then ask why do you want to meet that end? 

"I want to achieve a net worth of $50 million in ten years so I can generate enough passive income to support my lifestyle goals, give x amount to my church and make sure my parents are taken care of as they reach their retirement." Get it in writing so you can see the words (your first business plan so to speak). 

Then work towards those goals backwards to setup yearly, monthly, weekly and daily goals. You need to understand and learn investment models and systems regardless of your goals. 

Ask yourself: What do I need to do today to achieve my investment goals? From there you can begin to have a conversation around how you will get there. Don't start buying properties randomly or without a clear vision of where you want to be and how you want to get there. If you're not sure then talk to people and let their experiences and trusted advice guide you. Let their experiences save you time and money to stay laser focused on your own goals. No sense in not learning from someone else's wisdom and mistakes. Get a mentor or group of mentors. 

The absolute most important foundation to any business goal is to surround yourself with the right network of like-minded business professionals to achieve your ends. You're off to a good start on this website but there are lots of other sources and networks to cultivate as well locally here in Chicago.

 Don't underestimate the power of yourself. Go for it!

@Adam L. I can refer a few local commercial brokers if you'd like but you really do need a better local marketing presence and property overview. That location is not a heavily targeted area but it should have leased by now for sure especially considering the amount of money you've put into it and the improving economy. It looks great but I agree with an earlier post. You need to create a property proforma with much more information highlighting the space. Of course, price needs to be reviewed as well. 

I belong to two local off-market broker networks that I will post your craigslist ad on too. Hopefully you'll get some calls but get an update on there so you can attract more prospects. 

Better luck your way. 

JG

I just added a zero onto all of my goals and I like what I see 10x. Funny thing is it now looks attainable. Don't sell yourself short on your potential. Live with purpose. Live by priority and live for production. No regrets!

It may be in the Pullman district which is an interesting and desirable location (google Pullman District and check it out). This is not my area of expertise in Chicago (I focus north side) but I have a team member who I can put you in touch with that knows the area well. I will send her your info and have her contact you. Her name is Tiffany. Contact me directly if you want to talk. 

Jim

The AIA has a killer contract like these so see if you have an architect you can ask. The above are all right on. I would add to Jeremy's comment to get not only final but partial lien waivers at each payment to protect you and your property from the contractors and their subs from filing against you for their missed payments. Most any title company can give you these docs. 

Flipping can get you rich. Holding can make you wealthy. 

I used to flip when I was younger and killed it but I was always bummed when I'd see my properties resell for crazy high equity gains (the wealth part). My current strategy is to hold then continuously review my portfolio for possible refi or exchange options and also (later) rehab for highest/best use improvement options but those aren't flips. They're conversions based on improving my portfolio. They don't come until after at least 3 to 5 years into the seasoning hold process. 

Yes it is common. It most likely is because the services are not active (gas and water). 

Sometimes I get the b-box valve turned on in the public parkway where here in Chicago the mains are shut off to each house (shh don't tell) and then check the house pipes for leaks but that is rare. I never do this if the house has been winterized of course. On a flip I don't care at all because I tear it all out. 

This is the kind of question I rely on my lender to answer for me but here are a few comments. Hopefully you can get a WI lender on BP to respond in more detail to cross check these fees. 

Compare A and B without points (apples to apples so to speak)

A: 3.875% and $1076

B: 3.975% and $3087.50

Assuming these expenses are correct then you can see your answer right there. A looks better.

Each lender has to give you a TIL statement (Truth in Lending) which confirms these rates and expenses.

Now, you should be able to roll your closing costs into the mortgage on both options as long at the seller agrees and your lender approves (and gets that appraised value). That is a nice option because you bring no money to the table for closing expenses. The question as to whether you should do this really depends on your investment goal. 

If you're holding for less time than it takes you to pay off that portion of the additional mortgage payment for this option then it is worth considering. Make sense?

In other words let's say you have $2400 in closing costs and it costs you $50 more on a payment to cover rolling that into the loan (it would not be that much but this is just an example). That is $600 more per year or four years before you'd be paying more to exercise that option and it would not be worth it. If you hold it for 10 years than you'd pay $6000 for $2400 (in general and removing other tax benefits etc) which would not be a good decision. 

Build a network with a lender that understands your local market. That role is a critical partner in your investment purchases. Best of luck,

Jim