All Forum Posts by: Michael Garcia

You should read "The Ultimate Beginners Guide to Real Estate Investing" It will help you to know what part of real estate you want to get into

Multi Family is the way to go and I think you have the right idea. Though it sounds to me like you are under the impression that if you raise your rents you will raise your property value. This typically works only with commercial properties. i.e. 5 units and greater. A 4 plex is considered a residential, which is the only reason you can purchase with FHA. So the only way you're going to be able to finance is if the market goes up or you pay down the principle. Keep in mind that by the time this happens interest rates will have probably gone up enough to where you are more likely to be paying less even with the mortgage insurance on your FHA loan. So if it doesn't make sense today don't gamble on it making sense tomorrow. How much do you like the home? The numbers you posted...is that with all units rented or is that with you occupying a unit?

It looks to me like you have a 1% or lower property. I think you should shoot for the 2% rule. As a buy and hold guy you should put yourself in a scenerio where like Chris mentioned it doesn't matter what happens to the market, you don't care because the cash-flow is there. You could find yourself down the road ahead with equity and if the market climbs but don't be surprised if you find yourself making a couple monthly payments out of pocket. The best way to CYA is not to have a deal that hinges on speculation.

@Brie Schmidt & @Mark Creason

So my reasons are... a 4 is worth more than a 3 in the future if I choose to sell. Also, this "garden" or "in law suite" has 9 foot ceilings and is extremely livable but can I legally rent it if it's not a legal unit? I know everyone is doing it but I'd like to know what the rules are. Right now the lender is actually going to make me cap off water and gas in the unit because it's "illegal" which of course everyone just says not a problem just change it back after closing. I'm just wondering what I need to watch out for and would not want to get caught with my pants down in the future over something I could potentially avoid is all. Or at least know what to keep on the DL. lol

Looking at a property that the County assessors office says is a 4 unit building but the City of Chicago Certificate came back as a 3 flat. Can this be Challenged? Everyone says the Certificate Trumps everything. Any thoughts?

@Brie Schmidt Thanks now I can sound like I know what I'm talking about when I talk to my friends. Haha. Also, just checked the calendar, are we having another meet-up this Tuesday?

A friend of mine just bought a 3 flat here in Chicago and he was wondering when it's to late to evict his tenants that aren't paying rent. Anyone know the answer? Cause there's the thing about not being able to in winter isn't there?

@Edward Adekanbi Thanks. Have you ever been. Is it any good?

BTW it's in South Shore/Hyde Park

All units have separate utilities w/central air. There is a rock garden out front and a cement pad out back w/the four car garage. (No lawn care) three tenants in it now. One has been there for 14years, 3 years and 2 years. I will occupy one unit and manage property. The property is bigger than all the ones used in the comparables and I believe is much better built. It's 200 yards away from the golf course, 1/4 mile from the Lake Michigan and the City looks to be investing money in the area, fixing up the beaches, putting in new sidewalks and gas lines.  

Oh and property shark.com appraises it at 171k, only 5k less than asking.

As you can tell I love this property and want to make it work. I just hope it's a good decision.