All Forum Posts by: Justin Ericsson

what kind of property are you looking for?

chicago 2-flats $2,400 in rent very high yields.

Who looks at Marketplace postings?

Kristen,

There are three components to starting out as real estate investor.. 1) good credit this will be important later 2) 20 to 30% below market real estate properties you can buy 3) cash to invest. You really only need two of the three to start your RE career so good credit and hard work finding your first deal will ensure success...

Step one talk to friends and family and ask them if they will invest with you if you find a house substantially below market value. Pair up with a local seasoned investor / realtor to help you find your first property so you buy right. Don't be afraid to spend 3 to 5 months to find the right deal. You make all your money on the buy meaning if you over pay up front it's almost impossible to make money on the backend when you sell it. Once you have a contract on your first deal your will need to package up your due diligence nice and tight with real numbers, good graphics, etc. I can email you these docs to present to investors, friends and family.

Step two present your due diligence package to a few seasoned investors for feedback on the real estate deal to see what they think. Send to me as well I will tell you if its marketable. If they like it ask for referrals to people they know that will invest with you (JV, note, joint title). Asking for a professional investors advice on a real deal you have under contract that has equity usually leads to success as they can't pass up a good deal (I'm one of the those people lol). If you don't get any bites showing the deal to investors start shopping around the opportunity to friends and family. You will be surprised how open people are to investing in real estate if you can show equity in the property.

Step three is financing and deal structure once you have interested investor to go in with you on the deal. Having all cash to buy and fix your new acquisition is nice but not necessary. Every local market has numerous hard money lenders that will loan you and your new partner up to 80% of the total budget. For example if you are buying a single family home for $50k that needs $20k in rehab worth $100k the lender will loan you up to 80% of your $70k total cost so long as the after repair value has at least 35% equity after you put down 20% on the total cost. That means the maximum loan amount is $65k on $100k market value house. So how much cash do you need from your investor? You need 20% of $70k which equals $14k plus closing costs and six months of interest payments. Let's just round that up to $20k in cash from your investor to buy a $100k house with $25k+ in equity. This is very attractive to investors as they don't have to invest $70k upfront only $20k in this case. I mentioned above good credit is important as you can sign for the loan not your investor which puts the risk of the loan on you not the investor giving you the $20k to buy your first house. The deal structure with your investor can be many things the easiest thing to do is to setup a new LLC in Delaware ($300) and have a operating agreement defining your investment share (I can provide you this document to save you attorney fees if you like). Take title to this property in your new LLC which gives your investor equitable title to the property in partnership. Close with the hard money loan, rehab and sell it or if keeping as rental refinance out your hard money loan once you move in your tenant.

Happy hunting!!!

Turnkey Rental Property in Auburn Gresham

7621 South Normal, Chicago Illinois 60620Asking Price $180,000 | Monthly Rent $2,350

Duplex (2-Flat), 2 Story, Brick Exterior

For Pictures, Click Here: 7621 South Normal

Bedrooms: 7
Bathrooms: 2
Garage: 2 Car
Living Sqft: 2,451
Lot Size: 3,125
Year Built: 1907 (Gut-rehabbed in 2015)
Basement: Full, unfinished

7621 South Normal is a Brick 2-Flat in the Auburn Gresham neighborhood of Chicago. This 2,451 square foot duplex sits on a 3,125 square foot lot and features 7 bedrooms 2 bathrooms, 2 car garage, full unfinished basement with a astonishing annual gross rental income of $28K+ offered turnkey with full one year warranty on all maintenance repairs and government guaranteed HUD tenants. This property was built in 1907 and completely gut-rehabbed in 2015.The property is offered for sale to investors seeking high yield passive income at $180,000.A must see. All reasonable offers will be considered.

Annual Taxes: $2,576 or $1,288 per Unit
Fair Market Value: $195,000
Purchase Price: $180,000
Repairs: $0 fully rehabbed
Rent Amount: $2,350

Buy & Hold Numbers with 75% Conventional Financing

Annual Income: $28,200
Annual Operating Expenses: -$8,985
Annual Vacancy Reserve: -$1,128
Annual Debt Service (75% Loan): -$7,969

Rental Profit: $10,118
Cap Rate: 20.65%

Buy & Hold Numbers Buying All-Cash

Annual Income: $28,200
Annual Operating Expenses: -$8,985
Annual Vacancy Reserve: -$1,128
Annual Debt Service: $0 (All Cash)

Rental Profit: $18,100
Cap Rate: 10.00%

Comparable Sales in Last 180 days:

1) 7629 S. Normal, Chicago, Illinois 60620. Sold 12/22/14, $180,000, 2-Flat 8 Bed 2 Bath

2)7609 S. Sangamon, Chicago, Illinois 60620. Sold 12/31/14, $195,000, 2-Flat 6 Bed 2 bath

3)7256 S. Green, Chicago, Illinois 60620. Sold 5/20/15, $220,000, 2-Flat 5 Bed 3 Bath

Auburn Gresham Community

Auburn Gresham, one of the 77 official community areas, is located on the far south side of the city of Chicago, Illinois. It was the original location of the South Side Irish Parade before it was relocated to the Beverly neighborhood farther southwest in the city. Auburn Gresham in 2013 was one of the top five real estate appreciation areas in the city of Chicago.

Contact Us

To reserve this property or have questions please call Justin Ericsson at 602-421-0995

JUSTIN ERICSSON

Cell:(602) 421-0995
Fax:(312) 276-9601
Email: [email protected]
Web:ProfitFromRentals.com
Rentals: LettsPropertyManagement.com

This is the owner of Profit From Rentals - Justin Ericsson.  I'm available to answer any questions if needed on this post.  My number is (602) 421-0995.  My website is http://www.profitfromrentals.com.