All Forum Posts by: Paul De Luca

@Rochelle Fernando

Definitely go for the 5% down conventional loan if you can, particularly if you're going for a legal 3-4 unit property. FHA can work on a legal 2-flat with finished attic or basement unit but it will need to be deconverted for the appraisal. If you have some cash you can put toward making cosmetic improvements to the unit (paint, flooring, kitchen, bath updates, in-unit laundry) that will boost your rents and make your cash flow better.

@Eric Flatt

What's your buying criteria? Our team shares 2-4 unit/SFH/5 unit+ opportunities via our email list.

@Roy Langer

Assuming you rehab the house and rent it out, what is the ARV and the estimated cash flow?

I think it would be best to pay off the credit debt and rehab the house with cash but if you want to remain more liquid it could make sense to get a HELOC. The above question will help you decide if it makes sense to get the HELOC or not. Is there currently a mortgage on the property?

Chicago with the 2nd highest home price growth for March!

@Boris Le

This is just the reality of real estate investing right now and specifically in Chicago I analyze a lot of properties and most of them don't make sense. When prices, mortgage rates, insurance, and other costs go up obviously that is going to hurt the bottom line. We're still in a seller's market as well so there's still more demand than supply. There are deals out there but they are harder to find. When I look at a listing, I can usually tell in the first few seconds if there is cash flow potential by just looking at the list price, taxes, and rent roll. 

I've analyzed enough properties to know a 4-unit in Skokie for $700k-$900k with $15k-$18k property taxes and a rent roll of $1500 for each 2 bed/1 bath unit isn't going to work at 25% down. Especially when the owner has to pay the heat bill.

I just helped a client close on a 2-unit in North Austin to house hack where it should cash flow $300-$400+/mo once fully rented and have a 3-unit under contract in Brighton Park to house hack that should cash flow $100-$200/mo when fully rented. You can't be super picky in this market if you want to get something otherwise you'll be waiting around for something that may never come. Totally depends on your expectations and how realistic you are.

@Renee Krystek

Welcome! You are correct Chicago does have some STR rules and regulations you should be aware of.

I don't own any STRs but I think the book Short Term Rental Long Term Wealth covers the topic well.

@Donovan Penny

BiggerPockets has a bunch of calculators you can use for underwriting if you go to the "analyze deals" tab. If you're interested in a spreadsheet template, feel free to PM me and I will share the one I use.

@Connor Gentry

Welcome! Feel free to PM me if you want introductions to investor-friendly lenders and our team's preferred vendor list. I'm also a four-time house hacker & most of my clients are house hackers so I'm open to answering any questions you have.

@Diana Reinfeld

Not all agents provide equal value and service. Most of the value of a buyer's agent can be boiled down to the advice they give based on their experience, market knowledge, and network. Of course there are other things like integrity, responsiveness, customer service, asking the right questions, and administration (like scheduling showings) which are equally important and part of the job.

In my experience, most sellers are willing to pay a buyer agent commission if the net sales proceeds is acceptable. From a seller's perspective, I think the most important thing a buyer's agent does is connect them with a qualified buyer that can actually purchase on their home and close. Buyer agents are only paid on their performance and ability to do that.

An investor-friendly agent has a particularly unique skillset beyond a traditional primary home purchase/sale because they (should) help you identify good investment opportunities that make sense for you. That includes things like sourcing, underwriting, referrals for lenders/attorneys/inspectors/property management, advice on management, and more. So there is quite a lot more that goes into buying investment property that could make it worth your while to hire an agent.

For example, if you're inexperienced with analyzing/underwriting investment properties, you could easily overestimate/underestimate the income and expenses, which could lead to you either overlooking good potential properties or buying properties that don't offer a good return. 

If making a particular investment purchase could either help you earn thousands of dollars per year, or lead to you potentially losing thousands of dollars per year, do you think it's worth hiring a professional?

@Michele Richard

I recommend connecting with a few investor-friendly lenders to discuss your options. If you need a few referrals, let me know.