All Forum Posts by: Kenneth Garrett

@Alex Persons

I am familiar with the special use permit process in general, but not necessarily Fox Lakes.  They are all pretty similar.  I would contact the Village of Fox Lake when you have a property selected.  The process is about 60 days.  You’ll need to make any offers contingent on that approval process.

Fox Lake requires a special use permit to operate a short term rental plus a registration.  Make sure you check the details of that process.

@Evan Cruz

First of all, I hate all of those percent rules; 70%, 1%, 2%, etc. To answer your question you should include all cost. That's why those rules are a general rule of thumb. What if you ran your numbers and it came to 75% instead of the 70% rule, but cash flowed like crazy, you would have passed on it. Try to use actual numbers to the best of your ability. I've completed many BRRRR projects and calculating the ARV and rehab costs are critical to your success, but don't forget holding costs, utilities , insurance etc.

Contact the cities planning/zoning department.  It is not uncommon for certain areas to have a combination of zoning districts, but the city provides a list of permitted uses as well as special uses.  I have not heard the term “double zoned” but it may be a local term.

If the P&S hasn't been signed then there is no contract. Not sure how you have earnest money without a signed contract. I would resolve the open permit as this most likely will happen again with another buyer through the due diligence period.

It depends on your state or local law.  Many states require you to maintain the existing lease and when the lease ends you can enter into a new lease.  I usually prepare the new lease and contact the tenant about 45 days before the old lease expires.

@Artur A.

You can use the search tools on Redfin, Zillow and realtor.com.  You can use solds and put in the parameters.  I find that when I run comps I only use ones that are like comparisons.  When I get comps from brokers I have to remove comps that are not relevant to the property.  No disrespect to agents out there, but you need to use good relevant comps.  Some agents are very good at it while others not so much.

@Artur A.

I would disregard Redfin, Zillow and Realtor.com.  Those values are derived from an algorithm that takes a number sales in a given area and provides a median sales price.  They are not accurate.  Looking at sold comps compared to your property is the best.  It is best if you can find comps in the same neighborhood and better yet the same street.  Look for same model homes or at least square footage, age, style home, lot size, bedrooms, bathrooms, etc.  look at the pictures of comparable properties and see how your stacks up.  Remodeled kitchens and baths give you the best return on your investment.  If they are updated.  As @Theresa Harris mentioned not all changes will result in a higher value.  Go ahead and use Redfin, Zillow and Realtor for Comps.  You need to do your own homework.  

@Jin Zhang

Per the building code, if you create a duplex or two unit building it requires a 1 hour separating between the units.  Look at the zoning code to confirm the zoning district allows 2 unit buildings in that zoning district.  Be careful assuming because there may be others that it’s ok.  They could be non-conforming, which means they were allowed at one time, but the rules changed so they are grandfathered in.  Call your building and zoning department for clarification.  

@Ben Scarborough

I've used private lending for years. Typically people I have met and built a relationship at REIA meetings. Always use an attorney to draw up the documents. Most private lenders should use there own attorney, but many prefer to use my attorney. I always send a 3-4 page description of the investment with all of the numbers I.e., purchase price, rehab costs, holding costs, interest rate, etc. is it a flip or buy n hold or brrrr. Typically I do the brrrr method. There is no one system for all. Some PML do charge points. Typically rate in my area is 12% plus 2 points, but it does vary. Treat your PML like it's your grandmothers money and you will have access to money forever. Even if your project is a loss make good on your PML and it will benefit you in the long run as a credible investor. You're reputation is everything.