All Forum Posts by: Michael J Scanlon

Using leverage can be your best friend. If you can find a property that provides good cash on cash return, lets say 10-12%, then your leverage is making you money because your owner occupied mortgage rate will likely be about 3.5% right now. So you're investing at a greater return than your money is costing you. This is the beauty of leverage. I would house hack. Find something like a duplex and live in one side, rent the other. If you work with a good, investment specific realtor, you can massively increase your net worth just by doing this alone. 

@Trevor Fritz

I used Facebook marketplace. The Chicago rentals groups are extremely active.

@Brian Ploszay

West town

Give them a call and discuss it with them directly. Make sure you don't take partial payments (unless you're okay with that) or it protects them from eventual eviction. Ensure you know you are firm and that the late fee per day now applies. 

Unfortunately some tenants think landlords are rich and see them as a business that can just be stiffed rather than an individual who is on the hook for a mortgage. 

Get an attorney who is familiar with doing title searches. I am going through the same process and my attorney is running the title search for me for cheaper. You don't get title insurance but because its a relative, if you trust them (I know and trust my seller), you should be (mostly) safe. 

@Meghan McCallum

Yes I use Stessa

Stessa is great. Free and lets you track all of your properties, expenses, syncs with accounts. Cozy is good too. 

Find a good investment specific realtor!

It depends on your goals. If you are going to take your profits and invest them into property anyone, then yes do a 1031. It will be more stressful and you must make sure you follow all the rules obviously but no sense in paying taxes when you were going to buy more property regardless. Now, if you were unsure of cashing out vs reinvesting, then that has to be a decision you make. Remember, you can always passively invest your money into an opportunity zone fund and save yourself a lot on taxes rather than doing a 1031. 

It's all math here. If you pull out the equity, buy another place even at 5-6% CoC, what is your total return rather than just your ROI. It sounds nice to have a 15% ROI but your ROE goes down. Your ROE goes up massively when you pull the equity and your total ROI, rather than % ROI, may go up. Even if your total monthly cash flow is the same across two buildings rather than one, your net worth return on investment goes up massively because you're paying down two mortgages rather than one and appreciating two buildings.