All Forum Posts by: Joe Hermanson

Has anyone been to these Sheriff's Sales recently (2023) and if so, were there reasonable opportunities to buy multifamily properties?   

Griffin, unfortunately I haven't been able to find anyone yet.  I'll let you know if I do.  

@Amber Saulsbury 4-6% in Chicagoland area.

I've been looking in Naperville for over 6 months for both Condo's and SFH's, and the taxes, Condo Assessments and HOA's all drive the cost up where it's pretty difficult to get a cash flow of over $100/month without putting do a very large downpayment. Which really lowers you Cash-on-cash (COC) returns, which defeats the purpose unless you are looking for an appreciation play, which is a little risky at this part of the cycle. Look to Romeoville, Lockport, Aurora, and other small towns around Naperville and you might find something that fits your criteria.

I agree with the original poster and most people on the thread.  The late fees should not go to the property manager, they should go to the Owner.  The property manager needs to increase their percentage if they aren't making enough money for the scope of work being performed.  This is clearly in the original scope of work.  If rent collection was easy and didn't take any phone calls, site visits, etc. we as landlords would do it ourselves.  Finding/evaluating renters and collecting rents are the two primary job duties of a property manager and why we pay for the service.  Also, there's too much of a conflict of interest for them to keep the late fees.  In most cases, they've selected the renter, so they shouldn't profit when the renter defaults and "causes them more work".  It was built in already.  

Additionally, the vast majority of renters pay on time and have minor interactions with the management company on a daily/weekly/monthly basis, so the workload to profit ratio should be pretty good.  If they have too many problem tenants, then it's incumbent on the property manager to either; work with late payers (like having them pay weekly rent, on the day they get paid), replace the late payers when their leases come up, and/or help the landlord understand that they need to up their repairs/capex budgets so the properties are in better shape so tenants are happier, not complaining as much and paying on time.  All of which was in their scope when they agreed to the 8-10% management fee.  

Just my $.02.  

I'm curious as well to find out what the the pro's and con's are about the area.  

I need a new air conditioning system (condensing unit, coil, pad, whip, etc) installed at my house. Mine died yesterday.  Does anyone have a good contractor in the Naperville Area?  Need it installed next week.  

While you won't get the rent i think you may be in a slightly better position because as others have mentioned above, you now can search for a new, hopefully more qualified tenant, and get a more favorable lease in place, hopefully with a higher rent.  Additionally, you also have the ability to make any improvements to the unit while you are looking for your new tenant.  All around this could work out very well for you.    

Edward, I wasn't aware you got a HELOC before you left the (now) investment property (2 flat). I agree, I would use a HELOC from your principle residence first (because of the better rate) and then from the investment property if needed. Good luck.

After some advice on BiigerPockets I found that Penfed Credit Union does HELOC's on investment properties. The HELOC is based on a 12 year term, you can pay just interest or a full payment and it's interest rate is Prime plus 1%. No cost unless you need to have an appraisal done, which seems unnecessary in most cases.