All Forum Posts by: Michael Johnson

 Yeah, after it fell through being under contract due to the buyers financing last summer he was going to wait to relist until this spring/summer - timing worked out for me. 

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $690,000
Cash invested: $75,000

Contributors:
Jake Fugman

3-unit property in the Hermosa neighborhood of Chicago. This building was newly rehabbed in 2015 and in 2020 the basement was refinished and unit 1 was converted to a duplex down and is a 4/2. The upper two units are 3/1s. This properties cashflow doesn't jump off the page but with the somewhat recent rehab the units are in great condition, I will see lower capex/repair expenses and it will overall be a very low maintenance property.

What made you interested in investing in this type of deal?

To continue scaling my portfolio with low down-payment, owner occupancy 30-year fixed loan, maximize my ROI and lock in a stable asset that will be relatively low maintenance given its full rehab in 2015.

How did you find this deal and how did you negotiate it?

My agent, Jake Fugman, sourced this off-market and was able to get it under contract for me

How did you finance this deal?

30-year fixed, 10% down portfolio loan

How did you add value to the deal?

I was an easy buyer to work with, quick to respond and gave reasonable repair reqeusts

What was the outcome?

Closed on-time, with the maximum amount of closing credits allowed (21K)

Lessons learned? Challenges?

Respond promptly, always keep your agent in the loop with when you are looking and what you are looking for and they will take care of you

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Jake Fugman, is professional, prompt and really tailors what type of deals he brings you based off of what you are looking for. He is very in-tune with the market, "running the numbers" and him and his team do a high number of transactions - they know what they are doing.

After 9 months and going to eviction court I just lost my trial to my tenant who hasn’t paid in 9 months. I’m looking for a good Chicago attorney who can help me refile and go through this tedious process again

The fed just announced 3 rate hikes in 2022 vs the original plan to hike only once at the tail end of 2022. What are your thoughts on how that will affect housing prices in 2022? Very low appreciation?

I have a off market triplex under contract with a long close (5/2/22) due to my recent FHA purchase. Im wondering if rates increase in early 2022, would I have been able to acquire this property for less if I waited a little longer? Could I have squeezed the seller more due to the market cooling off? A lot of hypotheticals but I'm curious to see what people think about these rate hikes the Fed just announced.

Wanted to see if anyone had a creative idea on how to approach this deal. Its in a GREAT area if i were to purchase it as a rental.

The persons mother just passed and the house she lived in has a reverse mortgage. The house is in an A+ area, is right next to a great school and is highly desirable - people don't sell often in this neighborhood. The daughter doesn't know what its worth and would likely be upside down if they sold - she believes they owe 280k on the property. The house was kind of a hoarder house and is in need of some repairs/updates. The banks extension just expired last week and they just want to be rid of the property.

I was thinking subject to since they dont want anything to do with the property and dont have equity but i'm not sure how that works with a reverse mortgage. Does anyone have any experience with this kind of situation? Thanks in advance!

I'm looking to buy my second house hack in Chicago soon. I used an FHA for my first house hack and don't have enough equity to to refi out. I'm looking for a lender who can do a low down payment owner occupancy loan for my upcoming rental - 10% is the goal! I know some lenders who offered a 10% down program but removed them about a month ago. Thanks in advance!

@Crystal Smith

I agree. I just purchased a 4 plex in Rodgers Park between Northwestern and Loyola. I have a by the bedroom model and get a lot of student and medial student/resident inquiries! They are great tenants and pretty low maintenance - not to mention to mention I’m making more per month. My units are 4 bed 2 bath and 1850 sq ft ea.

@Bryce Renicker It was listed on the MLS. The by the bedroom works better with larger units, especially if there is more than 1 bathroom - you don't want 3-4 rooms sharing a single bathroom. If you are willing to manage more tenants/leases to drive higher returns, its at least something you should consider.

@Bryce Renicker

I bought a 4 plex in Rogers Park 5 months ago. The top 3 units are 4 bed 2 bath, the garden is a 2/1. In the listing the rents on the owners unit alone were listed $500-600 under market. I converted one unit so far to by the bedroom model. PITI w utilities are $4900, gross income once I move out will be $6900 - you can find deals - I got this for 25k under asking! It was just over the FHA limit when listed so it didn't pop up on most of their searches. It worked out in the end because with seller credits I still ended up with only 3.5% down.

Look for listings where you can raise rents or do a by the bedroom model. I may convert another unit to Airbnb and the last one to a by the bedroom - it’s at least easy to manage while house hacking.

@Marcus Auerbach

Thanks for the response! This lot is right behind where I grew up. It's a small town but there are newer homes around this area and the SFH span from 150-250k give or take. There aren't a lot of multi family comps nearby to go off of. I'll definitely need to verify rents, but there are no new build homes in the area for rent, only for sale. There are $5000 grants that are given for new builds from the city (not a lot but it's something). Mmmm