All Forum Posts by: Joseph Konney

In my opinion, the fidelity of Zillow reports are not that great. If I like the applicant, I'll often eat the cost of a supplemental report. I also have the tenant fill out my own application to get additional information that is not provided in the zillow profile / report. For example, SSN and validate it with a 3rd party background check company. 

I am using National Tenant Network https://ntnonline.com/ to run reports. 

@Daniel C. - welcome to BP! 

I'd imagine the same could be true of posting a for-sale sign in the front of the house, a free craigslist ad, or an email to one of my existing contacts saying 'hey, this is for sale!'

But then I think about other alternative assets like art or gold... you must hire a broker to sell your asset? Even with stocks, there is "full service" where you call a broker to sell the stock for you instead of selling it yourself through a platform. There's a lot of labor that can go into purchasing a home or alternative asset like... prospecting, negotiating, etc. 

I think there is a public mindset that purchasing and selling homes are compensated activities... but not so much for other alternative assets... a double standard. 

I could go a step further too... in rehabbing the property, if I have a roofer, plumber, electrician, and painter perform work on the property (paid by the SDIRA), I could be considered a general contractor while not performing any actual work on the property or being compensated. Is that crossing the line as doing work without compensation? 

I own my own real estate brokerage. As long as I don't pay myself a commission and the SDIRA pays for the listing photos, am I able to list the property myself on the MLS? Or could another broker at my company list and get paid commission so long as the company doesn't retain any profits and just acts as a pass-through entity to pay the other broker?

Here in IL, received commissions MUST be paid from a sponsoring broker to a broker/agent under their supervision, they can't be paid directly from a client to the broker/agent. 

The idea is that under these conditions, I would not personally benefit which could be viewed as acceptable non-rule breaking actions. Hoping to get some feedback from investors in the same position or a CPA. Thanks!

@Jonathan Klemm - I don't have a local lender to refer that offers such a discount, but I have not exactly asked around. However, it would not surprise me if such discounts exist for point and higher LTV. aptlendingcom no longer exists, but I have an OLD flyer as a reference below.

PenFed no longer does HELOC or related products for NOO LLC properties.

@Kyle Williams - Depending on what capital you have to work with, your income, and number of units in your acquisition, you could acquire multifamily with as little as a 1% down payment (for a duplex) and receive up to 10K in down payment assistance. 

To maximize your returns, I'd recommend going for a renovation loan to add instant equity to your purchase. You'd have to put 3.5-5% as a down payment of the total purchase price plus renovation cost. 

I specialize in investment multifamily properties and have a portfolio myself. There are a lot of nuances to being a landlord in the Chicago market. Happy to help, feel free to connect!  

@Shuvrajit Mukherjee You may be able to get a marginal discount on the interest rate for owner occupying a 5-6 unit... like .25 or .5%; I've seen this from time to time, but it would still be a commercial loan and that offering will vary from lender to lender or they may not offer a discount at all. 

Hi @Frank Ugboh

I disagree with much of the comments above - if the city of Chicago will only give a zoning certificate for 2 dwelling units and there are 3-4, then if the city department of buildings ever came in to inspect (they don't do this at point of sale, but it happens in most suburbs), they will likely require you to deconvert to original use (likely unfinished space) or get plans/permits. Even if you did the later, often the zoning rules will NOT permit use of the space as additional dwelling units, so you are left with at best a duplex to the attic or basement. In my opinion, it's a huge risk to underwrite these spaces with much, if any, value due to the potential remediation cost and lost income. 

Additionally, as-is many times you may run into logistical/disclosure issues like two tenants sharing electric or other utilities or public area utilities (laundry/hallways) on their bills as most of the time in this scenario each unit does not have dedicated meters for utilities. You could get by with it for months or decades without exposure - it's definitely a calculated risk. 

I agree with @Dan H. - If zoning says 2 units, but the property has 3 units, and the property needed to be demolished and rebuilt, zoning and the city would only permit 2 units. Financed buyers counting on the 3rd unit will run into an issue because the bank will only underwrite as the two units in case the property needed to be rebuilt. The city may still give a certificate stating that there are three legal dwelling units even if the zoning for the land limits to 2. This is grandfathered in: legal, non-conforming use. 

@Shuvrajit Mukherjee - If you're open to owner occupy 2-4 unit properties, there is a relatively new conventional loan product that allows for only a 5% down payment, but it doesn't cover any rehab costs. If the property needs minimal work and mostly rent stabilization, this might be an option too. 

If you have the cash to do the purchase and rehab without a loan, you could issue your self a single loan for both, then refinance WITHOUT cash out after the rehab to avoid higher fees and any seasoning requirements that lenders may have.