Bill Bein

Issues for a Licensed Contractor

There can be issues where a licensed contractor who specializes in that area must come in to fix the problem. These are what we call the BIGGIES! Most fall into one of these seven categories:

1) Roofing
2) Masonry
3) Foundation
4) Electrical
5) Plumbing
6) Heating/AC
7) Porches.

Issues for a "Handyman"

NOT ALL problems listed on the left require a licensed contractor. Much typically falls into a HANDYMAN REPAIR list. Case Handyman Services, one of the larger ‘handyman' services in Chicago, for instance, says on their website that they can handle REPAIR work for ALL of the following:

Baths, Basements, Carpentry, Concrete, Decks, Doors, Drywall / Plaster Repair, Electrical, Exterior Trim, Fireplaces & Chimneys, Flooring, Interior & Exterior Painting, Kitchens, Masonry, Mildew Removal, Moisture Damage Repairs, Plumbing, Porches, Roofing, Pressure Washing, Siding, Skylights, Wallpaper Hanging, and Window Replacement.

When it comes to the Biggies, TIMING is everything. If a building needs tuck pointing but you can wait even just 12 months, you may be able to refinance to cover that cost. And, certainly, in many cases if the work can wait 2-3 years, the appreciation that is reasonable to expect will be able to cover those costs.

Many of the issues your inspector finds will probably be what we call safety/stabilization costs- and you will want know if the total you should budget is less than 10K, 10 to 20K, or 20K up. But don't be scared by a LONG list. If a handyman is paid $25.00/hour, that person can do 100 hours of work for $2,500.00!

We believe that you MUST learn from your inspector (1) which, if any, of the ‘Biggies' exist, (2) possible costs for each of those issues, and (3) a sense of time when each major repair must occur. Our bottom line is this: any mandatory MAJOR repair work needed in the next year should be viewed as CASH required now-beyond that, you will need to determine whether or not you think the building will FLOAT itself through refinancing.

In summary, we believe that for multi-units a total budget of 50K or less is LITTLE/NO work, 100K is SOME work, and 150K is GUT REHAB. Few multi-units need less than that!!!

We also recommend that you download off our website a document called "The Rehab Checklist," which we think is a very good guide to estimating repair costs and is provided by the Community Reinvestment Corp (CIC) of Chicago. CIC specializes in work with large apartment buildings, but we believe its way of estimating costs applies quite well to homes or 2- to 4-flats.

And, remember, at http://www.chicagoland2to4flats.info/, you can see all the ways we are prepared to support you in the purchase of your investment property.

We'll set you up with all listings that fit your price, size and neighborhood goals-and ask you to pick which properties to go visit. But therein lies a dilemma... how will you know which ones to prioritize on? It's important to understand both what the listing sheets DO say and DON'T say.

What to watch for:

•§ You'll see the terms: ‘new', ‘newer', and ‘updated'? What's the difference? ‘Newer' and ‘updated' are NOT new! A newer kitchen may be 7-10 years old. Put a new countertop in an old kitchen and it's been updated. Sometimes the terms ‘rehabbed' or ‘Gut rehab' are misused, but at least theoretically they should mean that everything is new.

•§ ‘Mechanicals' (roof, windows, heating, electric, plumbing, etc.) are important, especially for single-family homes and multi-units. If NO mention is made, unless the sheet says a gut rehab was done, you should assume they are OLD (a listing sheet won't say "old roof," but if it says nothing, don't expect a new one).

•§ Some listing sheets are heavy with FACTS (like hardwood floors, cabinet kitchen, tall ceilings, etc). "Lots of light" might make a listing sheet sound great and mask the fact that NO updating has been done. A cabinet kitchen might be 30 years old or more; hardwood floors 100!

•§ "Updating needed" or "As Is" or "Needs Decorating" or "Lots of Potential" almost always means that a LOT of work is needed. ‘Move-in ready', on the other hand, often means little.

If you would like to print out a copy of this as a worksheet, click here:

Deciphering a Listing Sheet

And, remember, at http://www.chicagoland2to4flats.info/, you can see all the ways we are prepared to support you in the purchase of your investment property.

"Arm-Chair" Investors are those who do NOT want to live in the property they buy (a more precise term for this would be "NON-owner occupied"). The question we ask here is: Where have ‘arm-chair' investors like that been concentrating their investments?

Our work with arm-chair investors has led us to believe that SEVEN Chicago neighborhoods are particularly popular for those buying non-owner occupied, cash-flow property. For instance, Bill Bein, Chicagoland2to4Flats.info's founder, owns property in Grand Crossing (a south side neighborhood)-and he has now helped many different buyers buy in all of these areas.

• The west side neighborhoods are: Humboldt Park (census tract 23), East Garfield Park (census tracts 27), West Garfield Park (census tracts 26) and North Lawndale (census tract 29)
• The south side neighborhoods are: Woodlawn (census tract 42), South Shore (census tract 43) and Greater Grand Crossing (census tract 69).

We will look at each of them. The first is:

The southern end of Humboldt Park (census tract 23) is written up on the city's official site at http://www.chicagoneighborhoods.cc/neighborhoods/garfield.html

The Encyclopedia of Chicago, compiled by the Chicago Historical Society, has an article on it:

"Chicago's Humboldt Park community, on the city's Northwest Side, centers on the 207-acre park named for the naturalist Alexander von Humboldt in 1869. ..."
See more at http://www.encyclopedia.chicagohistory.org/pages/617.html

Neighborhood Street Maps

Since the 30's Chicago has been organized in 77 census tracts-and all real estate in Chicago is still sold by those boundaries. Click here for a master map of Chicago neighborhoods (it shows the 77 major neighborhoods that Chicago is divided into). And here are two larger maps--one of the north side, one of the south side:

Chicago NORTH side neighborhoods

Chicago SOUTH side neighborhoods

Click here to find a detailed map of each census tract.

But these are NOT the best maps when you are shopping for real estate.

Best Real Estate Shopping Maps

These show all "L" and Metra stops and individual neighborhood names. With each map being 8 1/2 by 11 in size, we think you will quickly see why we recommend them:

Chicago in 25 sections

And this is just the start of what you'll find at http://www.chicagoland2to4flats.info/!!!

Chicago as a city has many specific neighborhoods (like Wicker Park, Bucktown, etc.) At http://www.chicagoland2to4flats.info/, we provide a chart with the boundaries of some 150 neighborhoods in Chicago. To access that directory, click on this link:

Chicago Neighborhood Boundaries

And this is just the start of what you'll find at http://www.chicagoland2to4flats.info/!!!