All Forum Posts by: Michael K.

Quote from @Jonathan Klemm:

Hey there @Michael K. - Both @Prashanth Mahakali and @Samuel Pavlovcik are the two most active Chicago architects on BiggerPockets.  I'm happy to make formal connections to both of them.

We also have a list of several other quality architects we would happily share.

What part of Chicago will your project be in?

Lower West Side / I-55 corridor and yes, I’d take those suggestions!

Quote from @Randi Nicole:

@Michael K. are you seeking someone that services clients in the city or suburbs?

 City of Chicago

Hi BP folks,

Does anyone have recommendations for a local architect who 1) works with multifamily and 2) works with rehabs?

I'm looking to do a gut rehab on a 2-3 unit property in the next 6-12 months and am in the process of selecting my team. Thank you in advance for any recommendations you can share!

Quote from @Benjamin J Paoletti:

Many of the multifamily properties listed in Chicago (in the $400k-$600k price range) are built between 1890-1920.

I noticed many of these foundations have settled, cracks in plaster, dips in the flooring, etc. 

If these homes are 100+ years should I be concerned with these issues and the foundation? I know some investors are considering them just tear downs at this point.

Should I increase my budget to $750k+ and try to find newer built homes or is it worth it to invest in these 100+ year old homes?

Bit of a generic question, but wanted to throw this out there for anyone seeing the same thing or who would have some insight. 

Thank you!

Generally speaking, you will not find many new multi-units. Most newer properties are sold as condos. When I do see new multi-units they tend to be on the Southside (i.e. Kenwood/Bronzeville/Woodlawn). 

I own one of those 100+ year old properties and I'm confident it can stand for another 100 years. That said, there are some big ticket items to keep an eye out for. #1 being tuckpointing. If the exterior needs a lot of repairs that can be a huge expense. Usually the top of the building, and chimneys, will fail first. So make sure you look up when visiting the property.  #2 Look for a building that has a basement, not a crawl space. If you ever have sagging in a building it will be a lot easier to remedy if you have basement where you can actually walk around and see what's going on.  #3 garden units can be the difference between a building cash flowing and not cash flowing, but most of the time they are not built very well. So if you can find something with an unfinished basement and decent ceiling height you will have the option to build out the garden unit the right way. And having some sort of water abatement system is ideal. 

Quote from @Christina Venegas:

I have a house in chicago that I want to sell but it has tenants inside and a lease that ends in October. can i sell the house before lease ends or can i give my tenant a 30 day notice so she can leave and ill sell the house. Does anyone here have experience with that or been through something similar, if so can you please tell me what to do in this case. I appreciate your comments

It's not an issue unless #1 the buyer wants to owner occupy and needs to move in immediately or #2 if your tenants are extremely messy or make it very hard to schedule showings. Generally speaking, I think it's better to not have a tenant in place when trying to sell, except when the property is a multi-unit investment property and the rents are already at the market or, in the case of a single-family home, if your tenant keeps the place immaculate and has beautiful furniture (which will save you the staging fees). Good luck!

My standard application fee is $65. $875 is unheard of! Did they provide an explanation? It sounds like these guys are running a racket. 

 Reading this after having just completed my first eviction, I had to giggle out loud a bit. Your first two paragraphs were, word for word, exactly what happened to me too. 

Right down to sneaking in the little half-dog that poops everywhere, hahahha

Quote from @Patrick Britton:

So if anybody is looking for a super easy way to lose money here's my suggestion. Buy a property in the South side of Chicago and wait.

With enough time, the tenants will stop paying rent, destroy the place, and then not leave forcing you to paying all the legal costs and deal with an eviction.

Here’s the procedure with a little more detail: You buy a house, fix it up and rent it out (to someone who cannot afford to buy their own house). After a few months, the “renter” stops paying and gets to live there, free to enjoy the utilities that you’re also paying for, and then once this person finally vacates the house will be utterly destroyed.  Also, they will sneak a pathetic little half-dog in, which will be sick and poop everywhere.  

I truly consider myself to be a bit of a liberal socialist but because of the “renters” in the South side of Chicago have turned me into a vindictive, contemptuous, borderline-nationalist/extremist who is never, ever going to rent to anyone down in that area of the world. These people are rotten to the core, have no sense of decency, responsibility or good judgment.  

I didn't used to think this. I honestly thought that I was providing a service; a house that someone could live in, for a price that's less than the cost to buy it. I win and the renter wins. It is a win win situation, or is it not?

No it isn't, you're giving everything to these tenants. all you're getting in return is a massive tax write off.

But it's not all bad news because this is what you simply have to do:  Buy a house in a subdivision in a cul-de-sac and rent it to a family that has kids and pets.  I know, buying a house for a family in a cul-de-sac of a respectable neighborhood is gonna cost a lot of money. But I would rather spend a lot of money on something really good than spend less money on something that is going to turn into garbage.  

 Reading this after having just completed my first eviction, I had to giggle out loud a bit. Your first two paragraphs were, word for word, exactly what happened to me too. 

I'm an agent and investor and one of the reasons I got into the business was because after working with an agent on my first deal, I was left thinking "wow, I could definitely provide better service than that guy". As I see it, the role of the agent is essentially one of service, consulting, and marketing. We need to make ourselves available to conduct showings, hold in-person and phone meetings, write contracts, coordinate inspectors, appraisers, attorneys, etc, negotiate contracts and pricing, coach people on the process and do what we can to present the home in a way - whether in photos and in-person - so that it will sell in a reasonable amount of time at a fair price. 

You sound like you are a pretty DIY type of guy, and I can resonate with that, but there are plenty of people who are not. Some people really do not understand the market and could get taken advantage of. A lot of people become emotional or unreasonable during the transaction process (you wouldn't believe how many times I have to talk people off a ledge over little things). It helps to have a trusted voice there to tell you that you are not getting screwed over. There is also a lot of risk in the job as an agent, we often work with clients for months who ultimately decide against buying or selling and we never get paid anything. For each transaction that is successful, there are one or two that die on the operating table.

Side note, I think talking about the "average broker" is a bit misleading because I tend to see extremes more frequently than the average. You have your part-time agents and new licensees who might only sell a few houses in a year. Then you have your top producers who have been in the business for many years and conduct 10x the business of the "average agent". 

I think the business has changed and there is pushback against the traditional commission structure, and I think that's healthy. I would agree that when I am buying or selling a 250k home at 2.5% there is little room for me to negotiate my fee, but with more expensive homes we as agents need to work harder to justify our value. 

Lots of good advice here. I would just add that during the winter months, it is generally harder to fill units with tenants. How does the condition of the unit compare to the last time you rented it?