All Forum Posts by: Neil S.

Hey all,

Looking for a commercial lender in Chicago that can do cash out refi's on 2-4 flats. Anyone have any experience?

Thanks!

Thank you everyone! Some very helpful feedback.

I am looking to rehab 2-4 unit multi-families around Chicago. I would be flipping them to investors. The problem is most investors for these types of properties are out of state and if I use the MLS would I have trouble finding buyers?

If not the MLS anyone have advice on how I could find end buyers? Are there agents out there who can set you up with investors on the national level?

Thanks!

Hello, I am out of state but looking to invest in multifamilies in Chicago 2-4 flats. I am looking to connect with anyone who can help source properties and folks who have experience doing rehabs. I am looking for properties that I can buy and hold for the long term.

Thanks!

Those are the seller's pro forma numbers. Maintenance will be low because they are brand new renovations and vacancy is low because the units are in high demand. But to be conservative I used the 50% rule to account for future major repairs, re-leasing fees, longer vacancies ect.

@Aaron Montague Sorry didn't use the @ thing properly in my last post.

@Aaron Montague Sorry, you are right about the mortgage payment. I posted this late at night and have no idea where I got 673 from. Here are the updated numbers:

Assuming 50% expenses

Cash Flow = 962/month (11,544/yr)

COCR (11,544/128,250) = 9%

Assuming Proforma numbers:

Taxes = 417.50/month

Electric/Water (common areas) = 75/month (tenant covers rest of utilities)

Insurance = 108.33/month

Landscaping = 80/month

Maintenance = 169/month

Management = 338/month

Vacancy = 176/month

--------------------------------------------------------------

Cash Flow = 1797/month

COCR = 16.82%

The apartments are pretty luxurious for the area so vacancy is low and this is a complete renovation, new plumbing, water heater, furnace, kitchen, bathroom, hardwood floors, ceramic tiling, ect.

The overall area is not good (Greater Grand Crossing), but it's not a war zone. The block itself is somewhat nice near schools and churches and very few board-ups. But yes the Southside is not the safest place. Though it isn't in the roughest areas like Englewood + Roseland.

Hi all,

Buying my first multi family, a fourplex in the Southside of Chicago. This is a turnkey property that will be completely renovated with brand new finishings and will be managed by the same company. It is in a B/C class neighborhood, it's on a nice block but the overall area is a bit rough. My goal is long term buy and hold.

Purchase Price = 355,000

35% down (lack of comps) = 124,250

Closing Costs = $4000

Rent = 4400/month (26,400/yr)

Expenses (assuming 50% rule) = 2200/month

Net Income = 2200/month

P&I (5% 30 years) = 673/month

Cash Flow = 1527/month (18,324/yr)

Cap Rate (26,400/355,000) = 7.4%

Cash on Cash Return (18,234/128,250) = 14%

The seller's internal pro forma numbers have it at $1797/month cash flow (4% vacancy, 4% maintenance, 8% mngt) for a 10% cap rate and 16.82% COCR but to conservatively I am using the 50% rule.

I am quite busy with my own business so don't really have the time to do renovations and manage myself which is why I am doing a turnkey. What do you think of this deal? Thanks!

How hard is it to get loans through a family member? I thought of this but I don't think my father has a high enough income to qualify.

Anyone have an experience running into the 10 loan limit? What did you do after? Balloon? ARM?

@William T. What about if you invest out of state? Would I need to go to a local REIA in the state I am investing in?