All Forum Posts by: John Warren

@John Kelly you definitely don't want to move this into an LLC and jeopardize your tax status. All the military service members I have worked with have really enjoyed not paying real estate taxes here in IL! That is one of the most incredible benefits of being in the service.

You can definitely still write off mileage and many other items on your taxes without being in an LLC. In fact, the LLC does way less than people assume for you. It just helps... limit your liability to that property. It isn't some sort of secret bastion against all ills. I just segregate risk (and costs money to maintain).

I would get active at some local meetups where you can meet other housing providers to get a lot of these things answered. Where do you live? There are tons of great groups here in Chicago. 

@Jared Appel yes Straight Up Chicago Investors Podcast is a great resource. @Mark Ainley and @Tom Shallcross host the podcast, and it is on my list to listen to daily. Here is the link to the website. 

Podcast

@Michael Pienkowski you should connect with @Jonathan Klemm. He is doing one for our clients in Logan Square, and he has the capacity to do a bigger job. I know he responded here already, but people can't self-promote so I figured I would help refer him to you. 

@Jason Porto we own mostly multiunit in the Chicago suburbs in the Berwyn area, and as I have scaled up I set aside $2,000-$2,500 per unit for reserves. On a smaller building this might be a bit tight, but as the buildings scale up I find that this metric is a good spot to be. So on a 12 unit, I would keep an operating cushion of roughly 24-30k. 

One of the things that is missed so much is that CapEx doesn't happen in real life the way it does in a spreadsheet. You think through the major systems in the house (roof, exterior or tuck pointing, hvac, plumbing, electrical, unit turns, common areas) and if they are all new you should be good for a few years (5-10).

If you keep growing, you can also keep more of your capital working by having access to funds that may or may not be liquid cash. Maybe you have access to a HELOC, or you have access to a brokerage account you can pull from.

@John Kelly this is a rabbit hole that so many folks go down. You have two properties, one of which is your primary residence. You have amazing loans that were, no doubt, acquired because they were primary residences. If you are really worried about liability, get a bunch of insurance policies like an extra umbrella or beefed-up property insurance. 

@Connor Chatlos I would say the part AFTER a client signs a contract is when the real fun begins. I imagine you may be in for a surprise here in IL with how real estate is transacted. Having the right attorney is a big part of the business, but also understanding how violations, town inspections, zoning certs, transfer stamps, PTAX and other "fun" parts of the closing process work are a huge part of what we do as agents. 

@Shannon Mogilinski which areas do you cover? 

@Marc Shin we use both granite/quartz and laminate in rentals depending on the size and rental quality. We manage in the Chicago suburbs and do a lot of work force housing. We also have our own crew, so we do a lot of laminate. For clients who look at doing laminate, it almost never makes sense since the labor costs they are quoted to install end up eating up the savings. 

For an STR situation, I would only do a trendy quartz at this point. Quartz is virtually indestructible, and you will get that "it" factor in an STR that you need. The difference in cost shouldn't be as much as you are thinking.

@Kevin Zmick the rental market in Chicago can be very, very seasonal. This is especially true for the city and for most of the trendy neighborhoods. Your price point is right around where it gets tougher to rent in the off season. If you have the opportunity to list this during the summer in the future, you will likely be able to get quite a bit more for your unit due to seasonality. 

Take this time to make sure you have professional photos of the unit taken. This will come in handy next time you are ready to lease. Congratulations again on your purchase!

@Michele Richard west loop will be challenging for investing since the area exploded so much the last few years. It is a great spot for restaurants though! 

I would focus more in established neighborhoods if I were you. You may want to establish what kind of property you want as well. For instance, if you want to do 2-4 units then West loop won't work, but Evergreen Park or similar areas might due to the housing stock. 

I would probably think through which neighborhoods you personally would want to live in as well in case you decide to house hack.