All Forum Posts by: John Warren

@Brie Schmidt thanks for taking the lead on this. 

@Will Mejia it sounds like you don't want to deal with residential tenant issues anymore, which is fair. Why not look at things like triple net or industrial? Industrial is supposed to be a bit harder to enter initially for folks who don't have capital, but the tenant base is responsible for their units (not you). 

You also could find a partner to do the operations so you can avoid the parts that stress you out. Residential real estate has always been a great spot to invest since it is easier to get in/out than other sectors. Just figure out a strategic partner and you can still have exposure to it. 

@Anupam Banerji I can send you a great broker who handles all of our larger buildings. He insures a ton of buildings on the south side. 

Sounds like you recently got this deal under contract. Congrats!

@Lindsey Matejak we manage a lot of apartments in Berwyn and Cicero where the 2023 flooding happened. A lot of these are garden units. So far, this disclosure has had zero impact on leasing. There are so many forms in the lease packet, that this flood disclosure doesn't even get noticed. This is especially true since everything is signed electronically. I would just over disclose on this and move on. 

@Jarret Jarvis I can't imagine many house hackers hire a PM. I have known exactly one in my 10 years in the business. It takes enough of your margin, which you don't have because you put so little down in this market. I could see hiring a PM once you move out after a few years. We have taken over several buildings in Berwyn from clients who have moved out a few years back, and that I get. 

@Joey P. I am on the Neighborhood Building Owner's Alliance weekly calls, and we had this ADU issue come up. Some of the heavy hitters here in Chicago discussed the ADU program with a very nice person from the building department. The main issue is that to do the ADU you have to spend so much bringing other items up to code like electrical, plumbing, lighting (windows) and egress. Most of the time, an ADU will cost 100k just for that part and then you have to actually build the cosmetic part for an additional 40-50k.

It is a really cool idea. I hope more of them are built. 

@Delroy Watson I would check to see if you can do this the "right" way and make it an ADU. If so, you can add the value to your property more effectively. Digging down is a project I am just finishing up.... it is exhausting but potentially worth it. I would budget maybe 20-30k depending on how far you are going down. You also need to know if you will need to underpin the foundation as that can add up. Otherwise, you may need to replace a water service (13-15k), electrical service (10-15k) and upgrade wiring (This is a tough one, but maybe an additional 8-15k inside). Watch out for egress (windows or doors) as well.

@Olivia Blake what you are running into is a tenant how has been a long term tenant. There is a certain entitlement mentality and a long-term frustration mindset where they often times will mention repairs previous owners "promised" to make, etc. 

What we do is ask them to submit a work order immediately so we can review the requests. We then re-iterate how rent is paid for us (we use AppFolio). We do not accept zelle because of how easily it can mess up an eviction in Chicago. We use the AppFolio system that allows for credit card payments, ACH, etc. 

@Delroy Watson welcome to the forums! There are a ton of great meetups here in Chicago. Which area did you buy your first property in? North? South? Burbs? 

@Lucas Kirma welcome to the forums. You will meet a lot of great people here that will help you on your journey. 

If you are just getting started here in Chicago, house hacking is the ideal situation. You won't find a deal where you live for free, but if you can live in a great neighborhood at a reduced cost of living that is a nearly risk free way to get started in real estate. 

I would recommend you begin researching Chicago based meetups as there are a bunch of really good ones. You will probably figure out where you want to live here and then you can back into which areas make sense to house hack from there.