All Forum Posts by: Nnabuenyi Anigbogu

@Steve Vaughan

Haha. I completely agree. If not for her i might have bought a couple more flips and i know i don't have the cash to support that with all i have going on. I could live on Ramen and just invest and overleverage myself if im not careful and she often pulls me back. I have a different problem than most of the first time investors on here. I jump in 2 feet first and figure it out as i go along. I need to find a better balance. lol.

Thanks to everyone for all the congrats. Its been interesting.

 The flip is actually on Dover street. Dover and Wilson i guess would be the cross street. Or Clark and Wilson for those who dont know dover. There are plenty of million dollar homes in that area. It is a nice historic 3 story + basement property.

Hi All, It has been a very hectic and busy 9 months for me going from 0 to 60 in real estate. I always get a rush from reading some of the success stories posted on here so i figured i might as well share mine. It has been a good 9 months.

My first investor deal was an OO buy and hold 4 unit that kicked everything off for me. After that i closed on my first flip about 4 months later. I then proceeded to close on 3 more flips within 1.5 months, sell a condo and finally close another buy and hold closed yesterday.

The best part about all of this has been trying not to give my fiancee (wife in 2 weeks) a heart attack. She is a lot more risk averse than i am. However she has fully supported me in all of it and contributes funds and credit when needed. I look forward to enabling her to retire and pursue her passion for non profit.

It has been fun trying to do this while working full time but i am glad i went for it. Succeeding in this for me is a testament to working with partners. I own all my rentals on my own but all the flips are being done with construction partners which allows me to keep working full time and manage my rentals. I would definitely like to give a shout out to @Frank Ponticelli my attorney who has attended 6 closings with me so far, my partners and fellow investors to bounce ideas off @chidi Osuji, @John Casmon, @neil thakkar, @Xavier Y., @brie Schmidt and @George foster (i believe i met all of my partners at their meetups).

Also thanks to all the BP members who have answered my questions and guided me through some of the deals as they kicked off. 2016 should be a great year. Especially with the sale of all the flips that are in progress

Deal Synopsis

Albany Park 4-Unit
Acquisition: $495,000
Down payment: $100,000
Gross Rent: $49200 (I live in one of the units)
Vacancy (5%): $2460
Expenses + Capex: $14760
NOI: $31980
Annual Debt Service: $30,000
Annual Cash Flow: $1980 (my unit can rent for about 1K a month once I move out which adds over 10K to cash flow)

Albany Park 2-Unit + Garden
Acquisition: $375,000
Down payment: $13000
Gross Rent: $33600 (Living in the garden unit)
Vacancy (5%): $1680
Expenses + Capex: $10080
NOI: $21840
Annual Debt Service: $20892
Annual Cash Flow: $948

The building appraised for 25K more than purchase price (with FHA appraisal which is usually stricter) so once I hit six months I will refinance and remove PMI which will add $292 a month to my cash flow. Also rents are low for the current tenants and I plan to increase them at least 75-100 for each unit by June which will significantly increase cash flow.

Portage Park Flip (this has been presold and contract is signed. Just finishing construction)
Acquisition: $181,000
Rehab: $140,000
Permits & Holding Costs: $52,000
ARV: $450,000 (under contract at 450K)
Projected Total Profit: $77,000

Uptown/Ravenswood Flip
Acquisition: $415,000
Rehab: $185,000
Permits & Holding/Financing Costs: $100,000
ARV: $900,000 (very conservative as some comps are over 1mil)
Projected Total Profit: $200,000

Albany Park Flip
Acquisition: $215,000
Rehab: $130,000
Permits & Holding Costs: $60,000
ARV: $500,000
Projected Total Profit: $95,000

Irving Park Flip
Acquisition: $340,000
Rehab: $195,000
Permits & Holding Costs: $50,000
ARV: $730,000
Projected Total Profit: $145,000

Condo Sale - non investor deal (I bought this condo in 2013 to live in and it has served me very well and helped kick everything off. Lived in it for 2+ years then sold it)
Acquisition: $77,000
Rehab: $8000 (Replace HVAC and repaint and some minor fixes)
Permits & Holding Costs: Essentially 0. - I had a roommate paying rent that covered all of my PITI+HOA fees. I lived in it so routine maintenance was done by me and HOA took care of the rest. All utilities except electric were part of HOA fee. No vacancy cause roommate was there till i sold it.
Sold: $132000
Total Profit: $40,000 (Tax free since i lived there for over 2 years)

@Upen Patelis correct. I had to look it up myself but it is plain and clear.

Directly from the FHA handbook.

4155.1 2.B.3.d Restrictions on Non-Occupying Borrower Transactions - If the LTV exceeds 75%, a mortgage with non-occupying borrower(s) is limited to a one-unit property. The non-occupying borrower arrangement may not be used to develop a portfolio of rental properties. The financial contribution by the nonoccupying borrower and the number of properties owned may indicate that the family members are acting as "strawbuyers."

So you can use your father to cosign if you were buying a one unit property, or if you can pay 25% down. Best bet would be to see if there is a conventional low downpayment program you can qualify for. Or find a portfolio lender.

Why did they say it was impossible? From what you have said i see no reason you cannot buy an FHA financed property unless you have DTI issues or something else specifically tied to your credit. I have done what you are suggesting and there are no rules against it. You might want to check with other lenders. The main rule is that you can only have one FHA insured mortgage which is not an issue since you dont have one already.

Now if you have DTI issues or other credit issues that is different. Post those and we can see how they may be solved.

Excellent. I will reach out to them.

Hi All,

Had a quick question for the Chicago Landlords on here. Right now i self manage my rentals (4 unit and a 3 unit im closing on next week). Since i live in my 4 unit i do all the landscaping and snow shoveling myself.

I will be out of town for two weeks at the end of March and with the way the weather is going we might still have snow around then. I am looking for how you guys would go about getting temporary help with snow shoveling. I want to have someone that i can pay to potentially shovel if it snows while i am gone. 

Thanks

I would use your current preapproval and place an offer today. After your contract is accepted you are not required to use that same lender. You can go and apply with another lender if they are not willing to work with you.

Also FYI if you have your documents in order, a good loan officer can get you a preapproval in one hour or less. It wont be a fully underwritten pre approval (most people don't get this anyway) it will be just a regular loan officer preapproval.

This is most definitely not a requirement i have ever heard of and i have utilized FHA for a 3 unit. It might just be an overlay by the bank the lender is working for. If they will not budge on this then best bet is to find another lender. Let me know if you need recommendations.

I would agree with Jscott. I have a 50/50 partnership with my contractor because i was brand new to the business and knew nothing about the construction side of the business. Partnering with him enabled me to do the first 4 deals and even though it was more expensive i still made money. As i get better i will switch to just hiring a GC. If you are experienced just hire him as a GC.