All Forum Posts by: John Warren

@Brandon Brown for smaller buildings we have actually been having a lot more luck with State Farm. I can send my guy, but I feel like you go with whoever your local state farm person is. What area is this for? 

@Henry Lazerow nice work on this one. Little Village was a really good spot a few years back for investors. It is a lot harder to make numbers work now unless you can do the reno you did there. That requires a bit of experience with the older building stock. I really like what you did here though! Nice work. 

Welcome to the West Suburban Building Owner's Association!

We meet on a monthly basis to discuss topics pertaining to building owners and housing providers here in the Chicago suburbs. Our goal is to help you connect with like-minded individuals, stay up to date on industry hot topics, and to participate in resource sharing. We are a membership organization, but attending is free! We are centrally located to suburbs such as Berwyn, Oak Park, Forest Park, Elmwood Park, Lyons, Cicero, Stickney, Broadview, Bellwood, Hillside, Brookfield, La Grange and La Grange Park.

Join us at this month’s contractor connection mixer! Bring your contractor! Our group has invited all of the fantastic vendors and contractors that support our investing, and we are gathering as a group to introduce investors and building owners with contractors. 

If you are interested in being on our monthly email newsletter, feel free to sign up here.

If you are interested, check us out at our new website! We are now officially a chapter of the Neighborhood Building Owner's Alliance as well!
https://www.wsboa.com/

@Timothy Taylor is this your primary residence or an investment property? If it is an investment property then I would imagine most lenders want to be in the 1st position. If its a primary, you can definitely get a HELOC in the second position.

@Mark Ainley I can't wait! 

For sure! Will do. 

@Asim Purses this question comes up pretty regularly in the forums. There is an added risk layer if your basement unit is not legal and you know about it. Most of these are sort of a giant greay area. Check your zoning cert from when you bought the property to see if it is included. 

If it IS a legal unit, you can always add another electrical or gas meter to service the unit. If it is not legal, you will struggle to have the tenants pay their own utilities and will likely need to offer this as an all utilities included deal. 

Airbnb is a whole separate animal. If your unit is not legal, this is probably the "best" way to monetize the unit since you are just renting out part of your house. It is short term. 

The duplex up/down strategy can also work, but it rarely pays off if you need to do the construction. 

@James Wise we follow our process religiously. We do payment plans with tenants who have financial issues for the first 30 days, but after that we file right away. This is where most folks go wrong. Once we file, our attorney has a high success rate of working out evictions with folks and getting earlier resolutions or rental aid if they are willing to do their part. The collaborative, but firm approach is what I have learned works. 

Trust but file. We don't go past he 30 days anymore. 

@Kristin Vegas leasing can be so challenging in the winter. It is also very hard to do a good enough job staying in communication with owners when leasing is a time-consuming job. A lot of times, you think you have the right person and then they ghost you right when you think you are locking them in. The worst!

Where is the property located? Is the manager recommending good rental prices that drive traffic to the property? Ask them what type of lead flow they are getting. We typically find we need 7-10 physical showings to convert to an application. We often need a few applications to find the right person. The right person.... is gold. 

@Don Aleshire I think the decision to manage remotely should be made within the context of your expected hold period. A lot of "buy and hold" investors do not actually hold for all that long. Many sell within a few years (3-5 years is common). 

Are you coming back to Chicago? Self-managing makes sense. Are you moving and never returning to live here? Self-managing may make sense. Do you think you will hold these until the return on equity isn't that amazing and then you will 1031 exchange them? In that case, maybe... it is worth it, but probably not. 

Ultimately, the cash flow from these buildings is probably not actually driving your lifestyle. You sound like you are growing your equity in real estate as part of an overall strategy. I have a feeling you will self-manage successfully for a while, but the real test comes when those random events happen (heat goes out, major leak, etc). The day to day is easy.... it is the asynchronous events that your random buddy isn't equipped to handle that end up making it hard to manage from out of state.