All Forum Posts by: Tj Floros

Quote from @Paul De Luca:

What do you guys think about this? Current bill status can be found here.

 Concerning being a landlord myself here in Chicago. I was always on the fence about a security deposit vs a move in fee and have always gone move in fee because of all the negative feedback I heard about collecting a security deposit over the years. However, if move in fees are out then maybe I should really consider collecting a security deposit and bring a good tenant attorney on my team. 

Quote from @Sarah Patel:

Hello! I am new to the REI world and my husband and I's goal is to invest in a property by the end of the year and use as a STR. We live in the western suburbs of Chicago and have been weighing the pros and cons of investing in-state vs. out of state. While the current suburb we live in (Elmhurst) seems to be appreciating very well and surrounding comps support list to price ratios of 90% and up, we aren't sure if it's the best market for a STR (perhaps a flip).

While there may be better deals out of state, we worry that out of state investing may be too much for us  to handle as our first property. I say this because we have a toddler and have another on the way and both of us work W2s. I work 40hrs/week while my husband works anywhere from 50-90hrs/week. Do people still invest out of state in our situation? Sure! And they have my utmost respect. I'm just not sure how feasible it is for us personally. That doesn't mean we aren't open to investing out of state further down the line. I'm just wondering if investing locally makes any sense. Of note, we would use our realtor who helps us purchase our current home, already have some contractor contacts, repairmen, etc- making our core 4 already in place here. Our ultimate goal (as is anyone else's) is to be able to scale back our time at our W2s and replace that with income from real estate. We know that's not going to come with the first property but want to give ourselves the best opportunity to learn we can. 

Bottom line: anyone who has recently invested in the Chicagoland area think that there's still plenty of opportunity here? Or would you argue that the additional challenges that come with out of state investing are worth the potential of a better ROI? We are also hesitant about timing and whether or not to wait and see if the current administration actually restores the TCJA full bonus depreciation provision.

Any feedback/input is welcome. Thanks for reading! Excited to be here and learn. 

 Hey Sarah!

I'm in the same boat as you, well sort of lol. I just finished up my 2nd house hack which was a BRRRR and getting ready to do it again in 2026 here in Chicago. However, after this 3rd project I think I will be capped out of my DTI and will have to start putting 25% on projects, with that being said like you I want my dollar to go further then what it can here in Chicago. I love investing in Chicago because i think you can get cash flow, post remodel, and a good appreciation depending on the neighborhood you land in. In Chicago its really about making a good deal, its hard to find them on the MLS right now given the current market. I'm thinking about either investing further outside of Chicago or in a different market, IE out of state, all together. Part of me wants to stay 1-3 hours driving distance of Chicago so I can get to a project if need be and having the ability to get somewhat local referrals. Investing out of state I feel like I would need to get an entire team up off the ground and running when like you I have some elements of a team already in place. The only pro I've seen far about investing out of state, maybe lower price point to entry and probably lower property taxes, along with hopefully less pro tenant ordinances.

I really have not looked into what states I would invest in or what kind of capital I would need. I think how much you have to fund the project, down payment, closing cost, holding cost, remodel cost, will definitely direct you into a market that you can afford.  

If i were to invest out of state, i would take my time finding a market based on population growth, jobs, housing, etc. After finding a good market I would then just look for a local lender/ agent and find a very small size project with very light remodeling just to get my feet wet, learn the permit process, etc. I would also visit the area multiple times, driving the city/town, meeting the agent & contractor, and then come back to the project mid project and at the very end. After that project hopefully I would make a good amount of connections to scale everything up. 

Quote from @James Huff:

Good morning! 

I currently own two properties and one of my friends living in the city of Chicago is looking to get out into the suburbs and rent by the room or house hack. Anyone able to help? I can get you in touch with him.

Hey James! 

Your friend caught the house hacking bug too lol? Your friend can definitely find a nice small multi property just outside the city I have plenty of friends myself who are doing it. Chicago is also a great option because the city's housing stock is filled with 2-4 units, and the taxes can be lower in the city compared to some suburbs. I'm happy to help and talk with your friend with any questions or just bounce ideas off each other! 

Quote from @Connor Chatlos:

Hi All,

Looking at some potential BRRRs in some satellite cities of Chicago. Just moved here less than a year ago. Does anyone have or know a place to find some general contractors? Really trying to get a hold of construction costs for certain home fixes. 

Also, where is a good place to estimate rehab costs based on a specific property? Want to get better at coming with more accurate numbers. 

Thanks!

 Hey Connor!

I myself just finished up a BRRRR a couple weeks ago in Chicago. Depending on the area you are looking to buy and invest in here in Chicago I have a contractor referral. Like already said, your agent can help you with finding a good GC.

Quote from @Andrew Sangar:

Hey everyone, I just turned 23 and want to start buying property asap. I'm from Chicago and I currently do Airbnb arbitrage on a 4bed house in indiana. The place does well so I want to expand and buy a place in the same area with my partner. I had a few considerations in mind...

realtor?: it's my first time buying property so I feel like a realtor might help, but I don't like the idea of paying up to 3% in commission fees (unless she can convince the seller to pay it). 

Expensive or cheap: it's my first place and I don't know if I want to get a cheaper deal but 2 bedroom, but idk if it would pay as well. Or pay 100-200k more and get a bigger unit that I know would do well during fb season. I think I'd be able to expand faster if I get the cheaper unit...idk

location is also a deciding factor - part of the reason my current unit does well is bc it's within walking distance to the college stadium. 

I'd love to hear your thoughts!

 Sounds like you might want to recreate the Airbnb model here in Chicago. I have realtor referral for a agent who specifically works the Airbnb side of the house, he himself does Airbnb arbitrage and his thing is working with clients who want to buy a buildings to Airbnb. I'm happy to connect you to him if you are interested.   

Quote from @Jaime Zarate:

I was just curious is there ever a right time to buy a house like a lot of people around me say wait till the market goes down cause it’s high but like it always seems like it’s gonna keep going up you know I know there’s sometimes the moments where it goes down a little bit, but it’s always gonna go up no?

Hey Jamie!

Everyone has given some sound advice. I would say that it very hard to time the market and just to buy when you are ready. When to buy? when it make sense to you. If you are looking to buy a house or a multi unit it depends on a number of things: your knowledge on the subject, do you have money saved for down payment, closing cost?, are you ready for a big life decision, do you have a team in place? IE realtor/ lender. 

If you are ready then I would suggest connecting with a realtor, especially one who understanding investing, and a lender to start the process. That does not mean you have to buy, but talking with a realtor or lender to bounce ideas off of and what your goal is can get the process going. If you are looking to invest or house hack, BP is a great place to start along with books or podcast.

I'm glad to recommend some books, podcast or industry referrals if you need any.  

Quote from @Tereasa Petrusek:

In need of help being able to start the process being this would be my first Time buying / renting on my own with my 2 small children. 

 Like the other poster stated, I would start with talking with both a real estate agent that understands the investing aspect and also talking with a lender to get an idea of what your budget is. What you know what your budget is, then you and your agent can talk about an investment strategy that works best for you. Even buying a single family home is an investment, even though some people say it is not! I have lender referrals if you need some. I have made some mistakes in my own investment journey and have learned alot in the process, so I'm always happy to help others learn from my mistakes.  

Quote from @Jonathan Klemm:

What's up @Tj Floros!  Appreciate you sharing your Deal Diary!

Question for you - Why did you want to refinance into an FHA Loan? After you did the rehab?

ARV of $893k! Amazing!

What part of Chicago was this property in?

If I was able to refi into an FHA, I could have had a lower interest rate, higher cash out, and higher DTI limit, but the self sufficiency test is a killer here in Chicago. Over in the Bridgeport area,

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Chicago.

Purchase price: $300,000
Cash invested: $150,000

Bridgeport, Chicago off market BRRRR and house hack!

What made you interested in investing in this type of deal?

My 2nd deal, but my 1st. BRRRR.

Off-market legal 3 unit in the Bridgeport neighborhood of Chicago, comprising of a brick 2 flat with (2) 3 bed 1 bath units, and rear frame coach house with 3 bed 2 bath.

How did you find this deal and how did you negotiate it?

This was off-market deal that a family member of mine owned.

How did you finance this deal?

I used the 5% home-style loan to fund the purchase and rehab and then refinanced into a conventional loan. Would have loved to refi into a FHA loan but the building could not pass the self-efficiency test due to high property taxes, which is very common here in Chicago. Purchase price $300k with an initial bank ARV of $640k Estimated rehab budget $260K with a $30K reserve fund with an estimated 7-month rehab timeline.

How did you add value to the deal?

Each unit needed all new plumbing, electrical, duct work and HVAC, 4 new bathrooms, 1 new kitchen, paint, finishes, flooring, etc.
The coach house was a complete gut down to the studs, while the 2 front brick building units I was able to save both kitchens and reuse them.

What was the outcome?

Actual numbers: Rehab budget $320k, actual timeline of 11 months, mainly due to permitting and city issues. Final ARV $893k.

Cash-out refi i was able to pull just about 65% of my total cash invested (ie purchase price, holding cost, extra funding needed) while still cashing flowing $300 a month post-move-out with about $230k in equity.

Lessons learned? Challenges?

A ton! Especially when it comes to underwriting deals, holding cost, construction cost, permit issues, all in Chicago which can be a challenge all by itself.

I plan to refi again when rates drop further, but I think for my 2nd deal in my first 18 months and my first BRRRR in a high interest rate market, it was definitely a win in my beginners book

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

My lender and contractor who I'm happy to provide on request.

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Chicago.

Purchase price: $300,000
Cash invested: $150,000

My 2nd deal, but my 1st. BRRRR.

Off-market legal 3 unit in the Bridgeport neighborhood of Chicago, comprising of a brick 2 flat with (2) 3 bed 1 bath units, and rear frame coach house with 3 bed 2 bath.
Each unit needed all new plumbing, electrical, duct work and HVAC, 4 new bathrooms, 1 new kitchen, paint, finishes, flooring, etc.

The coach house was a complete gut down to the studs, while the 2 front brick building units I was able to save both kitchens and reuse them.

Purchase price $300k with an initial bank ARV of $640k Estimated rehab budget $260K with a $30K reserve fund with an estimated 7-month rehab timeline.

Actual numbers: Rehab budget $320k, actual timeline of 11 months, mainly due to permitting and city issues. Final ARV $893k.

Cash out refi i was able to pull just about 65% of my total cash invested while still cashing flowing $300 a month post move-out. I plan to refi again when rates drop further but I think for my 2nd deal in 18 months and first BRRRR in a high interest rate market, it was definitely a win in my book. Maybe not a text book "home run" but still a good deal.

What made you interested in investing in this type of deal?

Had an opportunity to try my hand at the BRRRR process

How did you find this deal and how did you negotiate it?

This was off-market deal that a family member of mine owned.

How did you finance this deal?

I used the 5% home-style loan to fund the purchase and rehab and then refinanced into a conventional loan. Would have loved to refi into a FHA loan but the building could not pass the self-efficiency test due to high property taxes, which is very common here in Chicago.

How did you add value to the deal?

Since this was a BRRRR everything is the property is brand new

What was the outcome?

65% cash out of total money invested, (ie purchase price, holding cost, exta funding needed) with $300 a month cash flow and about $230k in equity.

Lessons learned? Challenges?

A ton! Especially when it comes to underwriting deals, holding cost, construction cost, permit issues, all in Chicago which can be a challenge all by itself.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

My lender and contractor who I'm happy to provide on request.