All Forum Posts by: John Warren

This year I purchased properties out of state and in my own back yard here in Berwyn, IL. There are some unique challenges to buying out of state, and I wonder how many of these "turn key" properties are really great investments down the road. A lot of them are not in primary markets, so the rental pool is totally different than what you can get in a market like Chicago. We have many renters here with credit scores over 700, and recently had a tenant with an 806 credit score!

Hi @David Kors

I have purchased a four unit and then refinanced it after 6 months. I used conventional financing both times. The challenge in today's market is that there is so much cash floating around! You should be prepared to be outbid multiple times in the Chicago market, and the western suburbs are particularly competitive right now!

Are you looking to buy something near Hoffman Estates? Have you identified a good neighborhood to pull this strategy off? I am doing several deals in Berwyn right now, but I know there are some great neighborhoods closer to Hoffman Estates that people are working. 

I recently made the jump from my 4 unit to a 20 unit and a 9 unit. The fundamentals are exactly the same, and I think if you can manage a few small multis, there is nothing about a 6 unit that should scare you! Just make sure you understand the different pros and cons from a financing and selling perspective with the larger properties. I like that I can force appreciation much more effectively in the large multifamily space!

I ran into this same issue on my out of state property. I recently went to the property and found that various contractors had purchased enough trim to completely redo several apartments simply because they never checked to see what we have. I would agree with you that it is really tough to monitor purchases when you aren't there. We even had home depot call us each time our contractors were purchasing items, but do you really want to hear about all the nails and screws they are buying? It is definitely a catch 22!

• I would imagine your contractor will be able to answer your questions as well as anyone. Do you have space somewhere for another tank? Do you have easy access to the hot water pipes running to the washer? I have heard mixed reviews for tankless, and probably wouldn't use one personally in a rental property like that. 

I have seen quotes of nearly $3,000 for a commercial deal I recently did (9 units) in the Chicago burbs. We ended up paying a little under $700 for that deal. Most small multi or sfr deals in Illinois shouldn't be more than $500 or $600 in my opinion. 

@Byron W.The little things in these deals can make a big difference in your returns. For instance, my four unit has all electric base board heat, which costs me nothing in the winter. Some properties have boiler systems that the land lord has to pay. Some municipalities have different ways you have to pay for trash, etc, etc. The devil is in the details as they say. 

Hi Ja'ami,

Welcome to the site! Are you going to wholesale in the Chicago area? I noticed you were from Schaumburg. 

Welcome to BP! You will love the information you get here. I especially love the podcasts, and I get a great deal of value out of them still!

I only pay about $17-20 per month for electric in the common area of my four unit. I pay $220-240 bimonthly for water. $35 per month for trash ( I have to hire trash separately in this suburb). I have no gas to the building, so I can't help you there. Property taxes can be found online at the county assessors website for most properties in your target area. Where are you looking specifically?