All Forum Posts by: Mike Nelson

My understanding is that the quality can be good or poor, depending on the contractor.  They subcontract this work out so Home Depot does not have total control.  I have found that Home Depot has a large selection of goods at often competitive prices.  There are about six locations within a fairly close radius, and this is very helpful when I need that special $10 part.  The quality of their employees varies, but thats ok.  But I have probably wouldn't hire their contractor unless I had good references.

Welcome Andrew!  I am in Chicago (and Oak Park), too.  The Chicago area can be a very good place to operate in!

My question to follow up is how do you pick an insurance company?  You don't necessarily with the cheapest.  I have heard stories about people having an event, such as a fire, and having to hire an attorney because the insurance company does not want to pay the claim.

I am a new member to BP - great forum!  I began investing in 1987 when I purchased three two-flats on the same block in Wicker Park.  At that time the neighborhood was very rough, with gangs, etc.  Being an architect by profession, I enjoyed being a part of the renewal of the neighborhood.  At that time a 2000 sf two-flat in fair condition went for $60,000.  Today, that same property goes for $400,000+.  

In 2007 I slowed down, when I bought  a home in Oak Park, and sold all but two properties. During the great recession things were slow, including my profession.  I found money real tight to finance purchases and improvements.

I typically hold properties at least 8 years.  At my peak, I owned 12 properties (34 units).  Today I only hold a six-unit I bought in 1987,when it needed quite a bit of work and was difficult to obtain quality tenants.  Until 10 years ago, I had a married couple manage the building and address repairs.  They weren't the best, but at least I was able to muddle through and hold onto the building.  Now my standards are much higher, my focus is on upgrading the units and building to serve a good base of tenants better.  There is a big demand for apartments in this area, which is considered "cool" with many good restaurants.

I am in the process of refining my goals.  I work full-time as an architect, working for a good firm.  In it, I take satisfaction in improving the housing for elderly public housing.    My family time is important.  My six flat has a mortgage of $200,000, and a value of perhaps $800,000, so I have some equity and would like to achieve a greater cash flow.  I  am considering multi-unit properties in areas near my home,  such as Oak Park, Forest Park, and Berwyn, or perhaps chicago.  The challenges are finding properties in areas in which I would find tenants manageable.  

I enjoy reading the forums, there are certainly a lot of knowledgeable people, some amazing achievements, and a whole range of ideas, solutions and case studies.  I am open to any ideas.

Mike

Thanks, Brie!

In 1987 I purchased a 100-year old six-flat on a typical city lot in Wicker Park, along with an adjacent 24' x 125' lot.  The six-flat is entirely on one lot.  On the adjacent lot, I built a garage on the rear on the alley.  There is room for a building at the front.  The two lots have separate tax numbers.  My big question is to determine if the lot with the garage can be built on.  The snag is that the City of Chicago considers it a "Lot of Record" which may restrict whether the "vacant" lot can be built on at all, or to what extent.  The lots are zoned for three units each.  The six unit is OK because it is 100 years old and grandfathered in.  I am considering selling the lot if feasible and buying something which generates income in a 1031 exchange.

My conversation with a realtor 10 years (during the Daley administration) ago gave me the impression there is a kind of a "gray area" and under a new mayor this can change.  The zoning ordinance seems to say its not buildable, but sometimes these things can be appealed?  Can the alderman be of help, or a zoning attorney without going through a lot of expense?  The area is Wicker Park where three flat condos have been built on the same block, and lots may go from $250,000-600,000.  Also what is a good source of information to establish value with records of lots sold, and lots on the market?