All Forum Posts by: Michael K.

Victor congrats on starting the search for your first home. A couple of things, #1 Contest the tax assessment and you can probably get some discount #2 property taxes are more closely related to the neighborhood than to the actual condition of a home. Assessors don't know what a house looks like on the inside. Two houses on the same street may appear the same on the exterior but on the interior one might have had every room remodeled while the other house never had any work done to it and looks the same it did in the 1980's. #3 In cook county property taxes are reassessed every 3 years. If during that time the property sells at a higher price (because it was renovated, market improved etc) then the tax assessor will have that data and it will be reflected in your tax assessment.

Did you end up buying ht property? How's it going?

@George Bechir I think @John Warren makes a valid point. The difference between 20% and 25% is not so large that it's really going to change your trajectory very much either way you go. Deciding between 3-5% and 25%, however, will make a big difference. Think about your ability to make money and store it. If you have a super high-paying job and are able to stash away tons of money every month then that's one thing, but if it takes you a long time to save up 10K then I would consider the low down payment option. This will also leave you with more money for repairs and upgrades, which will allow you to refi and recapture as well as raise the rent.

In short, east Chicago has a very industrial feel and is not a particularly nice place to live. I suggest you visit before you buy something there. I have properties in Miller Beach, a beach community that is a sort of suburb of Gary, Indiana (also its primary tax base). Properties prices have been appreciating quickly there. Northwest Indiana has a lot of potential. My wife works at the University of Chicago Hospital and actually has a number of coworkers who live across the border in Indiana and commute on a daily basis. It's only a 30-45 minute drive to downtown Chicago. I'd say focus on communities near 90/94 and the South Shore train line/stations. 

@Lauren Flynn Thanks for sharing your experience. What is the market composition like in Clarendon Hills (i.e. Single-family/Multi-family etc)? I've been out to La Grange Park and Brookfield but not quite as far as Clarendon hills. Also curious what kind of rent you are getting after the rehab vs what you would have gotten without the rehab. Thanks!

I totally understand the desire to get the unit filled, it's painful to think about the money wasted when your unit sits vacant. That said, I would 100% cut my price before I lowered my rental requirements. I have actually started doing this on some of my rentals that have come up for renewal in the wintertime. People who are smart with money are also bargain hunters. I would happily take a $100-200 cut in rent for someone with a good job and 700+ credit score. These types of tenants also tend to take better care of the property.

I might also question the effectiveness of your property manager. You should ask them how and where they are marketing your property. There are a lot of non-traditional mediums available to find tenants these days. Feel free to reach out if you want to talk shop.

@Ryan Daniel Palmer

btw, just realized you posted a month ago, how did you end up resolving the problem?

Don't have to evict, the lease is going to run out anyway.

I've had problems like this before, typically it's been my fault for not properly vetting tenants (had some bad eggs come in under subleases when I wasn't paying attention) or for being over-eager to get a tenant into a property (saved a month of rent on the front end but ended up losing it on the backend). Overall it doesn't sound like your situation is all that bad. Based on my understanding, he is only late on the current month's rent but has paid all the past months, correct? With only three months of the lease left just tell him that you won't be renewing with him. For 6 month to 3-year leases in Illinois you only need to give tenants 60 days' notice. You'll probably have to keep chasing him down for rent for the next couple of months but then he'll be out of your hair and you can find someone more reliable. Try not to start an arms race. You should still be able to get most of the rent he owes you by pestering him. If you piss him off with threats he's more likely to try to screw you over.

Hey Ryan, congrats on the 3 flat! For rental purposes, I think having a nicer/modern kitchen and bathroom will go a long way. My 4 flat had space heaters and no A/C when I purchased it. I put in ducts + furnace + a/c in two units for about 10k a floor. It makes a lot of mess (particularly with lathe walls) but definitely improves the quality of life in a unit. Other easy-to-install niceties are 1# kitchen range hood that vents to the outside (a lot of places just have microwaves the vent back into the room), #2 recessed lighting with dimmers instead of a single boob light, #3 replacing old beat-up trim boards with new trim boards. Those are just a few that come to mind. If you are buying a tear-down condition building then I say go ahead and change the layout so you can have connected living space and larger bedrooms - that's gonna go a long way on resale value. However, If you are buying something that is already habitable and would not make sense to gut then focus on the points that myself and others have brought up. 

Best of luck and reach out if you ever want to talk shop!

Hi Jeff, congrats on taking the first steps. I own a 100+ old building and there was a lot that needed to be done after I acquired it. I am glad that I had the cash on hand to fix all that needed fixing, as it has helped me find and keep better tenants. 

Electrical and plumbing make up for the biggest headaches and cause a lot of problems. I had my water supply pipes replaced with copper and added a lot of electric lines to the kitchens and bathrooms where most big appliances are being used. Other big-ticket items are #1 tuckpointing, #2 exterior decks, #3 Roof, #4 Furnaces/Boilers. I know there is a lot of love for brick but with the cost of tuckpointing an entire 3-4 unit building being around 50k it makes frame buildings look more attractive from a cash flow perspective. Particularly seeing as how tenants typically choose homes based on pictures of the interior, not exterior finish. 

How has your search been going?