All Forum Posts by: Paul De Luca

@David P.

Do you have photos of the bathroom from before the tenant moved in? If there was no crack before the tenant moved in, then you can make the case the tenant caused the damage.

@Kristin Vegas

Sounds like you need to have a conversation with your property manager about the process and general expectations for your relationship. Or if they continue to be difficult to work with, start looking for a new property manager.

I don't think it's necessary for you to specifically mention in your listing description that you accept section 8 tenants because it's illegal to discriminate on the basis of income in Illinois, which protects Section 8 voucher holders.

@Charlotte Wilson

If you will be occupying one of the units, I recommend 5% down conventional rather than FHA.

@Alex Rosen

Following this thread as well because I also have a few unmetered properties and wasn't able to get the meters installed before the deadline. How many units does the property have? That does seem high.

Best practice to avoid surprise water bills like this in the future would be to request copies of the recent water bills while under contract for due diligence.

 There are some general guidelines you can use to analyze rental properties. 

1) Understand what financing & terms you will have access to. That affects your loan amount and then principal & interest payment.

2) Estimate rents based on recent rental comps

3) Account for all operating expenses such as property taxes, insurance, repairs & maintenance (landscaping, snow removal, cleaning etc), property management (if applicable), vacancy, utilities (what does the tenant pay vs what you would pay?), and cap ex reserve fund. PMI/mortgage insurance is also applicable if you are putting less than 20% down.

4) Estimate your upfront rehab budget if the property needs updating 

@Charlotte Wilson

As long as you continue to occupy the property you purchase with an FHA loan and you're not applying for owner occupant financing on the other property, that shouldn't be a problem. I recommend discussing your strategy & financing with a lender to make sure you could qualify for both FHA and then an investment property loan.

 Nothing special, just properly screen tenants for gross income 3x the monthly rent, credit score minimum 600-650, no prior evictions/judgements/foreclosures, stable & verifiable employment, and clear communication & expectations. If I have a tenant that wants to move out early, I don't fight them over it and find a new tenant that will be easier to deal with.

@James Wise

Like @Jonathan Klemm and @Brie Schmidt said, this is a very general statement and not the reality for some real estate investors in Chicago. I've been investing here since 2019 and haven't had any evictions although I have had to negotiate early lease terminations with a few difficult tenants.

If you screen effectively, you can dramatically reduce your risk and probability of needing to evict a tenant. I'm also not aware of any of my clients needing to evict tenants either.

All investments come with risk, so you just need to understand how to reduce it and manage it.

@Christina Venegas

If you know the renter is problematic, why would you even consider making them a tenant?

@Sam Abazari?