All Forum Posts by: Kevin Chen

@Andrew Postell @Grant Rothenburger @George Skidis Thanks for the input!

@Brie Schmidt

@Brie Schmidt Yeah the most I've been offered is 75% so it might still work for me if the appraisal comes in favorable.  Thanks!

Hi @Tara T., McKinley Park is a good area with B class tenants and the area is still priced well to cash flow.  I did not explore Section 8 since it's another animal and don't think I have the appetite for that type of investment.  However, I've heard that the people who do have very good cash flow with Section 8.

I am looking to pull cash out after rehabbing a 3-unit investment property. The purchase price was $285K at 75% LTV. I've called around to numerous banks and credit unions, the max LTV that they're willing to do is 75%. Fannie Mae lenders were even lower at 70%. My agent told me he can sell the building for $350K. However, if the property doesn't appraise for that value, there won't be much of a cashout. Any ideas on how I can find a lender that would do 80% LTV? Or should I looking into other types of lending options i.e. commercial, construction, lines of credit?

After acquiring the property, the units were all updated.  Two units are leased out for $1,200 and $950. The last unit is on the market for $1,150.  Rents were previously $650, $700 and one unit was occupied by the previous owner.

The property is located in Chicago.  Thanks!

@Andrew Holmes How would I go about searching finding the shadow inventory?

@Jeff Burdick My cursory criteria was 300K for a 3-units and 400K for 4-units.  I'm continuing to look in McKinley Park.

@Crystal Smith Thank you for the detailed answers!

@Art Maydan I have not pursued off market yet.  Will have to learn how to do that on my next one.

@Michael Facchini Do 203k require the property to be owner occupied?  Going through a big bank on my current deal and they require 25% down for Fannie.  What are alternatives to get in at 20%?

Thank you for everyones input! I really appreciate it. I'm actually under contract for a 4-unit building in McKinley Park now.

Hello BP Chicago,

My name is Kevin and I live in the north side of Chicago.  I have been educating myself about long term real estate investing through listening to BP podcasts, reading books (Kiyosaki, Keller), and attending the local meets.  I am interested in 2-4 unit MF to buy/hold, and have been searching for my first deal since Feb. With that said, I wanted to get a temperature check on my approach and whether I should change it.

I have been working with an agent who set up an MLS search for 2-4 unit MF in McKinley Park, Bridgeport and Logan Sq area. Inventory is very low and properties vaporize! People are also buying at above list with multiple offers. There was a 3-flat (all 3/1) in Bridgeport that sold for 481K cash. One unit is owner occupied and the other two rent for 800 and 635. Are people making money at these prices? I'm guessing that everyone is speculating to sell on the back end of higher or living in one of the units. Recently, I expanded my search to Jefferson Pk, Albany Pk, Lincoln Sq , Ravenswood area, but those are even worse. Brick two flats are 350-400 and only rent out for ~2500 for both units.

• Do I need to go outside of Chicago (Tinley, Chicago Ridge, Indiana)?
• Are there no deals on MLS?
• Should I look for single families?
• Should I hunt for deals at the tax sales?
• Wait for the market to cool off?
• Is the criteria of 1% rent unrealistic in Chicago?

Looking forward to get some feedback and to learn from everyone. Thanks.

Kevin