All Forum Posts by: Joe Freeman

In my area, some listings for condos are sold individually stating they are coops. I am looking at a 4-unit building in the near future, (each having 2 beds/1bath) but I have seen that some listings state that the building is a coop, and I know in Illinois or at least I was told in the past that coops aren't familiar here in this state and that it makes it harder to get a loan for them. I was wondering what the costs would be or even an estimate on converting a 4-unit building that is a coop to a condominium? My goal for the 4 units is to rent each out and hold for the long run so some advice on this would be great!

Thank you in advance for the help!

Hi David, Maggie from Chicago area. I’ve been listing to your show for a year now. Great Show! In November 2022 we got our first long term condo which is producing $170 monthly positive cash with 7.4% rate (investment loan) . Our goal this year is 2-3 more doors. It seems like we can’t make up our minds what kind of real estate to do next. I always get into this analysis paralysis mode and going in circles. We have $500k cash that we can put into down payment plus another $100k to be used as security if something bad happens. I have a good W2 job and approved for $1.5M for investment property. These are the options we are considering and was hoping if you were in our shoes what would you do with that amount of money in the current market conditions.  OPTION 1: Short Term Rental in the Smoky Mountains $1.5M with good view and established rental history, making $3,500 monthly cash flow (if this is possible in the current market).  OPTION 2: Long Term in the area 4-plex, using the B.R.R.R.R method or not with about $1,000 monthly cash flow.  OPTION 3: Long Term in the area 5+ units BUT this put you in commercial loan (don't know anything about) maybe paying it cash? We are looking at one now for $825k - 6 units $98k rental income $58k NOI - $4,800 monthly. OPTION 4: Put the cash in CD – You can get 5.15% for one year. On $500k = $25,750 or $2,145 risk free -OR- 6 months CD for 5.05% = 12,470. Thank you for your time!

I hired a real-estate agent that we have worked with in the past to find us tenants. Recently we had an open house where we had a several potential applicants walk through and many seemed interested. One in particular though was asking questions that made me feel uneasy. Maybe I am overreacting but I feel like it could be some sort of scam.

The applicant first said they had already submitted an application without even seeing the place, this is not true because the real-estate agent would have told us. They mentioned that the place wasn't for them but a family member that was living out of town. The family member from out of town would have a second person living with them briefly to get settled in. Towards the end of the showing the person that was viewing the apartment said they want to avoid the non-refundable move-in fee and offered a two month security deposit with no interest. They were very adamant about trying to close the deal the day of the showing. The next day I get a phone call from a number I didn't recognize, it was the people that viewed the place before stating they never received an application from the real-estate agent and they were getting "nervous" because they really want the place. I never had my phone number listed and my real-estate agent did no give out my number so they obviously used public records to look it up. 

I want to believe they are just very impatient people and really liked the place but it was the first time something like this has happened to me and of course it is a bit unsettling. Has anything like this ever happened to anyone here before? Does this sound like a scam?

@Joe Freeman I am pretty sure the agent listing it doesn't even know what a cap rate is.... this is pretty common when you look at stuff on the MLS. The deal probably doesn't make sense. You won't find any comps in the area much above 100k per door, and this deal will have a lot of violations if/when they finally get the town inspection.

@Joe Freeman I am pretty sure I have been in the 10 unit you are talking about. I doubt you can get anywhere near $1,150 for rent, and I would guess your real rental rate for a nice unit would be closer to $950-995. You also would want to dig into the town inspection as Franklin Park, like many near western suburbs, has a rigorous point of sale inspection. 

For comps, you will find plenty of comps on Costar or a similar platform. This is a space where most of these buildings are sold by brokers focused on commercial RE who have access to different tools than the MLS.

This is correct! Many investors, new or experienced are using the DSCR method as well to expand the portfolios!