All Forum Posts by: Lumi Ispas

@Danile Moctezuma, In Chicago the sale through a Quick Claim Died has become illegal about 1-2 years ago. 

There is a legal way to buy a home though bypassing a full closing and that's through placing the home in a Trust and then changing the beneficiaries. Chicago Title will do it that way, as long as you pay the City/County/State Stamps due on sale.

Let me know if you need help with this next time and I will send you the info of the guy I work with at Chicago Title.

Welcome to the Site! Chicago has been attracting a high number of international buyers. As the 7th wealthiest city in the World, I will say is very safe to invest here!

http://chicago.curbed.com/archives/2014/04/29/chicago-is-the-7th-most-globally-integrated-city-in-the-world.php

Good luck!

@Dan Perrott, 

I can understand how you feel.  I know some investors that don't buy in the City for the exact this reason.

In Chicago, as the number of tenants is higher than the owner occupied homes, and the tenants are whom are considered to have the power at vote in the city,  most of the laws passed are in favor of the tenants.

I will assume that there are many large cities that have this issue.

@Dan Perrott, 

"Source of income" has already been added in Chicago to the Discrimination list a year ago, which in no way has negatively affected the landlords.

As a landlord you have a list of requirements for your tenants and I won't think that the "source of income" was on your list.

Most of the landlords I know, including myself have: credit score, landlord reference, employment status, landlord references, pets policy, etc.

As long as the Section 8 tenants meet all the other requirements you have, including the fact that it shows that he has income to pay the rent, why would you be worried who pays the rent? 

@Nathan Emmert, 

I did not take in consideration any losses, only depreciation. And I agree with you that if you make over 150K you can't take depreciation, however with a good CPA and few properties owned, you can be considered a RE investor, and bypass this condition.

Another way is for LaRon to be paid as an LLC and draw a salary of 100K a year, this way he will qualify very easily. I know of physicians that make 400k- 600K and they get paid though an LLC and draw salaries of 100K or so.

Where there is a will, there is a way, all fully legal.

Hi @Richard Carpenter, Message me with your email address and what type of properties you are looking to purchase, as we have more than one type of contract and I will send you what you need.

Hi @LaRon Phillips, 

First of all, as a physician, you should take advantage of the physician loan, which is a no down-payment loan with the lenders not taking in consideration your students loans.

There is only a bank in the city that I know does that type of loan and I can send your their info.

Regarding paying off students loan, I will say buy investments that give you the cash flow to pay the payments on the student loans. At 3.12%, your student loans are almost free money. Most of the economists will say that the inflation runs at around 3% a year, which is almost the interest you are paying on these loans. 

Let's assume you buy a house for $115,000 with 20% down as investment, at an interest rate of 5%, so the loan amount is $92,000 (almost as much as your balance on your student loans), wich will bring you a monthly mortgage payment of $494 + property tax $200 + property insurance $100, a total of $794.00/month expense for this home.

Let's further assume that you are renting this home for $1400, that will give you a $606 cash flow per month.

In the same time, you will get to amortize the $115000 for over 27.5 years, meaning that $4182 will be deducted from your taxable income, and if you are in a 25% tax bracket ( and I bet your in a higher tax bracket based on your income) you will save about $4182 x 25% = $1045 per year, plus, out of the $494 mortgage payment at the end of 12 months your paid about $1500 in principal, meaning your $92000 balance on the loan is down tot $90,500.

So let's see, after the first 12 months, you have a home that if it appreciates at 3% a year, you are in the following situation:

Home worth:                    $118,450

Balance on the loan:         $90,500, ( paid off$1500)

Cash flow:                          $7,272

Saved on tax a min of        $1,045

So at the end of the year your $23000 down-payment brought you back:

$3,450 in appreciation

$7,272  in cash flow

$1,045 in tax savings ( minimum)

$1,500 in principal

Total of $13,267 in cash you gained in 12 months for an investment of $23,000, so you can get your money back in less than two years.

Imagine taking this to the next step of using the 75K as down-payment for a 3-4 flat with more cash flow, more tax deductions, more principal gained, and higher appreciation. 

Will using the 75K towards paying your student loan give you the same return?

And let's keep in mind that the moment you paid off this property, you have an asset that hopefully has appreciated nicely and now the cash flow grows by the amount you used to pay for the mortgage.

At his moment this is what I will do if I were in your place:

Step 1.  Buy a home with a physician loan with no money down, and have the seller pay your closing cost, so you can get the benefit of paying your home off and not your landlords, also to get some more tax write offs as you could use them.

Step 2.  Buy an investment property that will give you further tax advantages and give you the cash flow necessary to pay the payments on your student loans.

Good luck to you and let me know if you have any questions!

Hi Daniel,

You need an expert to run the comps until you learn your area very well.

Zillow and Trulia can diverge by a lot from the real prices, as they don't compare apple to apple and orange to orange, meaning that they will compare single family homes with condo units and multifamily buildings sold in the same time, within a block. In Suburbs, if the homes nearby are very similar, the price can come up very close to the market value.  In Chicago, where every house is different than the next door house, the value can be off by tens of thousands.

Apple to apple means 2bed/2bath condo  is compared only with 2bed/2bath condo, similar age, sq and conditions.  Single family home 3bed/2bath compared only with similar 3bed/2bath, and if you don't have enough comps, than you have to add or substruct value from the comparables next door. Let's say if you compare a 3bed/2bath 2000sq home with a 4bed/1bath 1800sq home, you have to add value for the 4th bed, substruct value for one bath and substruct for the 200sq.

I advice you to call Realtors from your area to run these comps for you. If the homes are in a very far area, you should hire Realtor to do BPOs for you. ( Broker Price Opinion). A drive by BPO it's about $50.00, so the broker will send you a full report with pictures of the house and street, or if you do an interior BPO you can pay $80-$100, and in that case the broker will take pictures of every room, mechanicals, everything inside and outside plus will give you a detailed report including all the sales within half a mile, all the inventory, etc. 

These reports take a lot of time for the Brokers to do, however if you can't make it in the area, sometimes will be worth it to you to just get a BPO. Plus offer the commission to that broker in case you'll flip the properties. 

Hope that helps!

Congratulations! You are going to be happy with the property. 

I have a property in Forest Park and love the way the Village steps in immediately if there are any tenant issues!

Good luck!

Hi Kumar, There is a Meetup for Bigger Pockets on December 2nd at 6:30 pm, at Dino's Pizza in Norwood Park, address 7004 W Higgins.

Good luck!