All Forum Posts by: Landon Vowels

I agree with @Forrest T Schue that the HELOC has the benefit of only paying interest on the amount drawn to date. We have utilized a line of credit to help us grow, but we also like to always consider other financing options if we are able to source/secure them, because 1) having options is always great and 2) having multiple sources of financing allows you to plan on what is next. At the end of the day though, often the lowest interest rate loan makes the most sense for the project.

Hi James, my suggestion would be to reach out to some local structural engineering firms and ask if they can do a consultation. It will probably cost at least a few hundred dollars, but they should be able to evaluate your building and provide a suggested path forward in a report. And if you aren't able to get an engineer to come out to the site, then at least get 1 or 2 additional quotes/opinions from other foundation repair companies.

Geotechnical companies can do soil tests, but that's usually only needed for a new build or an extensive addition and will cost several thousand dollars, and would probably be overkill unless required by the city or suggested by the report.

We are making our project EV-ready by accounting for the power location+capacity for a future charger in our renovation, but will likely not buy/install the charger until there is more demand and/or expressed interest.

If there is ever a time where major electrical work is needed on your property (as in our case), it could be an opportunity to discuss with an electrician what would be required to install a charger.

Also worth noting, if you are considering an EV charger, it could be worth looking into whether there are any tax credits, rebates, or grants for installing chargers, from either the utility company and/or government.

Agreed with Clayton above. In addition to significant risk to the lender, a new build is a significant risk to an investor as well. It is very difficult to manage a construction project (staying on schedule and budget, etc.) so having a partner or GC on board with experience would be smart.

Also mentioned above, financing for the average investor is difficult. The land will likely need to be purchased in cash, and then you'll probably need/want a construction loan. Talking to local ground-up developers about where they obtain financing for their projects and their lender requirements would be a good place to start.

I'm working on a project now (not a complete new build, but a significant construction project) that essentially went as followed:

The land was bought using a line of credit, and that land was considered equity for a construction loan that we obtained from a local bank. I believe our backgrounds went a long way to help get the loan approved -- My partner has a background in finance and provided a detailed financial plan for the project, and my background is in architecture.

New construction has proven to us to be much harder -- requiring more resources, time, and energy -- than we had originally anticipated. Not to say it's not rewarding, but would definitely emphasize the large the risk of such a project.

Good question. Per the Chicago building code, you'll likely need a second stair. There are some exceptions as to when you can get away with a single stair (full explanation below) but you'll see it is not easy to do.

I actually used to live in/rent a third story attic space with a single stair, and as a tenant I thought it was fine. Now a landlord (and architect), I wouldn't build out the space without the second stair since it really is a safety issue/liability (especially in case of a fire) if anything were to happen.

Full excerpt of building code below:

According to the Chicago building code on egress requirements, the third story above grade plane within a dwelling unit [which in this case is the duplex-up unit], all the following conditions must be met:
1.) the building is equipped throughout with an automatic sprinkler system
2.) the floor area of the story does not exceed 1600 sq ft
3.) the dwelling unit has an exit that discharges directly to the exterior at the level of exit discharge.

Your third story attic space is unlikely to exceed 1600 sq ft, but you'll probably find the sprinkler system to be cost-prohibitive. The single stairway also has to be continuous to the ground floor exit.

Tom is correct, that in order to enter the administrative adjustment process you'll need to first submit the permit set and then get denied. Which does mean that you'll be paying for drawings/architectural services for something that could potentially take months.
And my project truly has taken months, waiting on various city department reviews and responses.

In terms of your question of the ARV with no neighborhood comps -- I would look at it as adding a bed and a bath to the total lot count, and seeing if there are any comps (as opposed to an exact unit match).

That being said, could you simply add that 300 sq ft to one of the existing units (extra bed and bath) to avoid the adjustment altogether?

Depending on what metrics you are looking at in terms of whether it will be worth it in the end (cash on cash return, etc.) it's probable that the extra unit will be worth the hassle due to the increased rent.

Yes! I am going through the process of an administrative adjustment at the moment-- 2 of them, actually. It's definitely possible, and if you what you are trying to achieve is truly allowable by the zoning code, then you have the right to do so. That being said, it's not a particularly fast process and there is a whole submittal package required. I will follow up with more specific information when I'm in front of my computer. Happy to provide some more insight.

Hi Olga, congrats on the 4-unit. I came across this article (dated July, 2021) that sums up some rules. It's not an official City document but might be a good place to start. Also, see the resources listed on the Airbnb website for Chicago. I believe they try to give you as much information as they can to help get you set up.

Congrats to all the above. After several years of putting my head down and studying, I was able to finally pass all of my Architect Registration Exams in 2021 and become a licensed architect.

Hi Matteo, the HOA fees would simply be included in the flat rent amount you charge the tenant. The rent should ideally cover the mortgage/loan plus the HOA fees and all other expenses (taxes, estimated CapEx, utilities that won't be in the tenant's name, etc.)