All Forum Posts by: Michael K.

Check out the 2020 Fair Notice Ordinance by city of chicago, ill attach below. The amount of notice required depends on the amount of time the tenant has occupied the property, not on the length of the lease. Occupancy for 6m-3yr requires 60 days' notice, 3yrs and above requires 120 days' notice. Under 6 months only requires 30 days' notice. https://www.chicago.gov/city/e...

That said, these time frames do not apply if the tenant is delinquent on rent.

@Ben Morrow are you planning to continue living in one of these single family properties? or are you wanting to move into the new property? What kind of financing are you trying to secure for the investment property?

I would also look to see what the return is like from renting the SFHs, if its not an effecient use of the $ you put into them then I would consider trading out that property.

@Carli Schlaker welcome to the Chicago scene! There are a lot of people on here who can give you solid advice. There is also a list of local meetups here https://www.straightupchicagoi...

One thought I had was that going FHA on a multiunit you are going to need to find something that is close to move-in-ready condition. The FHA appraisal has requirements that a conventional loan would not. See here https://www.nerdwallet.com/art... That's not necessarily a bad thing, but it will make it harder to find a value-add type of property.

I own and manage a few multi-units here in the city, would be happy to share my experience with you and help you run numbers on potential deals!

@Tyler D. I grew up in the city and have lived here for about 2/3rds of my life. Despite crime numbers seeming grim at times, there are plenty of neighborhoods that have drastically changed for the better over the past few decades. This map shows where gun violence was most prominent this past year. https://chicago.suntimes.com/c...  Looking at long-term data, homicides in Chicago have generally been decreasing for the past 30 years https://www.chicagotribune.com... The closure of a large number of public schools under Rahm Emmanuel and then Covid-19 are primarily what has contributed to recent spikes in the crime rate. Trump also contributed to cultivating a poor image for Chicago by constantly using it as his whipping boy, even if it's not actually the worst actor.

I like to call Chicago the Metropolis of the Midwest, which I believe is a fitting title. And, due to network effects, this is unlikely to change anytime in the foreseeable future. While there are some headwinds, I believe that Chicago continues to be a good place to put your money. And remember, those property taxes are being used to pay the pensions of retirees who primarily live in the state and city, so the money will eventually end up back in the local economy.

@Paul Brower cash flow looks decent considering how many variable expenses you baked into your analysis. The 6.7% cap rate is good but depends on the condition of the building and the neighborhood it is in. Are the rents actual or estimated? Just added you, would be happy to go over the numbers with you in more detail! Feel free to reach out

Usually, I will tell buyers to budget 4-6% for closing costs, yours seem more like 8-10%. Then again your purchase price was low, so I can see how that might happen. Title fees suck. 

Your loan origination fee seems high, did you buy down the interest rate? Otherwise, the loan fees seem pretty normal to me. I can't tell if the title fees have a section cut off or not, but it seems like they are pretty high, also not sure what the closing coordination fee is all about. 

@Jacob Martinez welcome to the scene! Where are you located? Reach out if you need helping running numbers on a deal, happy to help!

Sorry for that to have happened to you but thanks for getting the word out! So was it like a subscription service to get leads on deals?

@Dinardo Rodriguez

Taxes on that property were 2151 in 2020. It looks like their assessed value went up by 48% after the latest round of reassessments, so they will probably be looking at a tax bill closer to 3k in the future.

On the point about FHA loans, that PMI is going to stick with you for the lifetime of the loan unless you refi to a conventional down the line. That said, if I were picking up a property like this I would want to have a decent amount of cash on hand for whatever issues might come up.

On rents, I'm getting 1400-1500 for a 3 bed 1 bath (same small bedrooms) in Little Village, but that is all the way on the other side of Little Village, near the California Pink Line and Pete's Fresh Market. 

The last thing I want to point out is that this property went under contract in 5 days, so the market is saying that the price is right.