All Forum Posts by: Michael K.

Western, as it is in many parts of the city, is a sort of dividing line. Add to that, there is still only limited gentrification in Pilsen. Probably 90% old housing stock. As you get past Western there are very few new construction projects, but I have started to see some, and some nice rehabs as well. I think long-term it's a good play but don't count on it happening quickly. You also have north lawndale to deal with as you get further out past Kedzie. I own a 4 flat near Rockwell and Cermak, have had it for 5 years. I can't say the neighborhood has changed that much as of yet. 

@Braeden Meier that's awesome. I started out that way and I think it makes the most sense as a first step. Get your hands dirty, gain experience, and eliminate your monthly rent payment in one fell swoop. Some guys here have already made good suggestions. As a young guy without much baggage, you can get as creative as you like. Which areas have you been looking in?

@Christopher Hunter what purchase price per door are you looking for? Wasn't clear what you were saying about your HELOC, is that for a down payment? What kind of financing are you looking at?

@Reed Meyer when you say unlock a lot of value what do you mean? If I were selling a property like that I would probably price it just as a would two three flats, or one six flat (whichever comps are more favorable). Essentially though, it's apples and oranges. The combined taxes may actually be higher for the two separate pins than for one single pin. If you mean that in unlocks flexibility so that you could sell off one and keep the other then yes I agree. 

Investing is not so much an issue of right and wrong as it is a question of better and worse. The more you educate yourself and the more deals you look at the better deal you are likely to find. I'm not sure why you say you don't have time to look for deals, you can do literally do that from your phone while sitting on the toiet. Then again, maybe you are making high 6 or even 7 figures a year and your work time is worth more than worrying about finding a great deal?  I would suggest finding an investor-friendly agent who can save you some time and provide guidance. The first property I bought I went with a random agent I met at an open house and, though he was a nice guy, he did not help with the due diligence at all (probably because he did not know how to). Luckily I bought when the market was a lot lower so ended up making money anyway. Hope that helps!

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@Paul Flynn This is a place to ask questions openly, no judging. Fortunately, there is an easy solution to your problem. The whole reason people get into rental real estate is that on paper you are not making much money, meaning you are paying only minimal taxes on your rental income. Add to that, in the current market you would be lucky to find a ready-to-go property with much cash flow at all. So after the mortgage interest deduction, operating expenses, Capex/repairs, and depreciation, you will not have much left to be taxed (the net on your schedule E), even though in reality you will have put yourself in a much more favorable financial position. I don't think you should feel guilty for doing this, as realistically you are not going to be raking in the dough as a new landlord anyway. Hope this helps!

@Luke Stewart was interested in trying out this model. You guys should talk.

@Jeffrey Ma sounds like a great business. How did you find a landlord who was willing to work with you and where are you sourcing your tenants from?

I know some people who rent to travel nurses/techs etc, I think its a great business idea. If you are in the industry then you already have the connections. My wife is also in healthcare so we've considered going that route too. Just be careful that the condo building you are buying into allows for short-term rentals (or any rentals for that matter). That's sort of the catch, the larger the building and the more amenities it has, the more rules you will run into. 2-3 story walk-ups in nice neighborhoods could be a good place to start, lower HOA fees too.

In Chicago, I would say that generally if you are hoping to get cash flow from a fully rented property then multi-unit is the way to go. More doors and less tax pins is good for that. With 100k saved up you should be able to get something. Just know that if you are going the FHA route that PMI will not come off for the life of the loan, whereas with conventional PMI will be removed after you exceed 20% LTV. You can go as low at 3% down conventional.