All Forum Posts by: Joseph Konney

Do you have any information on the current costs of this program? Their website is not very helpful in this regard.

If it's a cost to the tenant I don't know that they'll pay it. If it's a cost for me I don't know that a rent increase or profit decrease would be worth it when there are so many no cost options out there.

Hi @Esteban Ibarra - As with any location, numbers numbers numbers, there are always going to be pockets that appreciate and depreciate in value too. You can always sell/buy with a 1031 exchange (profits are tax free when rolling into another in kind property) out of state after you are comfortable. I have 24 units in Chicagoland and can attest to there being strong cash flowing opportunities and even tax rates of less then 1K per year per unit. Chicago is also the 3rd largest MSA which is great for employment and opportunity.

Thanks for sharing - please follow up with your rehab story and final numbers / ARV after renting out!

In the case they don't have a bank account, I make them mail in or drop off the rent to my office. I personally wouldn't trust a bin full of money orders on site no matter how secure it was, not to mention that is one more thing I need to physically go out and check regularly.

I've been building in a discount for electronic payments before the 1st of each month into my leases. 

Hi @Brian Burke #2 - I think your analysis practice will pay off as to not being stuck in that analysis paralysis phase - good work. I concur that multifamily is definitely the way to go. 

If you are handy and thinking about a renovation loan, keep in mind that your general contractor will be the one doing the work. Undergoing a significant rehab can yield aggressive returns, but always increases the risk of unknowns and cost/scope explosions. You have to determine your risk tolerance. 

If you want to be very conservative, buy something renovated recently with the plumbing and electric already updated. Many times these already have tenants, so you are cash flowing from day one. 

I typically like to go somewhere in the middle with a scope where I can buy with a conventional loan that doesn't require a renovation loan. Preferably something that I can add value and is under market rent. Do some surface renovations and bring up to the new market rents. 

Given you are going to be living in this place, the MLS will likely give you a much better chance of getting into a preferred location. It doesn't hurt to network, but it's a numbers game where the MLS wins hands down. I anticipate the next few months will be a good opportunity for new housing inventory. The number of newly listed properties in March-April will typically increase roughly 50%, and another 50% in May-June. If you're having trouble finding "the one", these next few months should see a lot of new inventory.

@Tim Bradley It sounds like the seller disclosure sheet didn't list this one! I'd guess the work over the active septic tank was not permitted. If seller said he didn't do any work without a permit and you can prove work was done without one, he may be liable for some of this tab.

If your long term strategy includes more rental properties and your target to live off the funds is beyond 15 years, you may be better off with the 30 and using the excess cash flow to for additional purchases. You can always be more aggressive at paying off the balance early if you need to. Another advantage to the 30 is that if you get into a pinch, your total monthly payments are a good amount less than a 15-20 year. 

Investment property financing typically runs .5-1% higher than owner occupied. Long term 30 year fixed rate financing in the low 3s is likely not going to happen for investment property. 

There is no shortcut to good due diligence. One of your stops should be a mortgage broker who works with many lenders and can do some shopping for you. Sometimes they can offer a better deal than what you can get on your own directly. Be sure to look beyond the rate - what about closing costs? points? terms? broker fees? title fees?

Hi @DeAnthony Whitney - Feel free to PM about your specific wholesaling on concerns.

Also, even for those on a limited budget (see websites below for details on eligibility/requirements), there are some grant programs that will allow home purchases for as little as 1% down of your own funds in Illinois. You can find down payment assistance programs for 6-10K here (SFR and 2 UNITS ONLY):

https://www.ihda.org/my-home/getting-an-ihda-loan/

Stackable with the IHDA program, for DuPage county, the county offers up to 3K and this program up to 15K for down payment assistance (SFR ONLY):

https://www.homedupage.org/

For the single family homes (or in your owner occupied unit of the 2-flat), rent out rooms to potentially eliminate living expenses and generate cash flow to fuel your next investment. You can do this in conjunction with wholesaling to possibly reach your goals faster. 

@Kuriakos Mellos - More or less, Illinois licensing law only permits licensed real estate agents / agencies to collect a commission. If they are charging a fee / commission to fill your unit, they must have a real estate license. Sum an substance, anyone offering to fill units for a fee is doing so illegally or is a licensed agent. If 'apartment hunters' is a firm, I have not heard of them. In addition to those websites I mentioned as examples, you might find some 'flat fee' MLS submission services where you essentially pay a fee and they will post your rental to the MLS - they will be a bit more pricey.

For multifamily and cash flow, broadly speaking, I like North Austin and Woodlawn areas of Chicago. Also, the immediately west suburbs like Forest Park, Cicero, and Berwyn.