Monday, January 5, 2009


So now I am stuck with a bunch of new decisions that I need to make about my first personal real estate purchase...I originally had in my mind the idea that only planned to spend about 400-450k and throw down 100k for the down payment, however after looking at the properties in this price range I am no longer sure about this. The fact remains that this place will also be my personal home so I want to make sure to get something not only that will make me a profit and is a good investment, but also something I will feel happy to live in myself. The price range that I am now looking at is the 700-750k price range which although is way out of my initial comfort level I have to keep in mind that the cost of the building will be paid for through the profits since I am not taking any profit from the building. As long as I use the rents to pay for the insurance, taxes, and mortgage for the property and place the rest of the profits that are made from the rents into the same account so that double mortgage payments are made to pay off the mortgage faster. I can have the building paid off faster which will be better for me in the long run because I will only have to pay for the taxes and insurance and have a larger base of income coming to me from the property which can in turn go towards the other future buildings to pay them off faster as well.

My other option would be to purchase a smaller building such as a 2-4 unit building for less and purchase that and not keep a unit for myself and simply rent out all the units and start collecting a profit on that which in turn will lead to the down payment for the 2nd building. The 2nd building will be the one that I will take a unit from for myself and will cost more than the first building. The only problem with this idea is that I personally don't like it lol because it doesn't leave me with any property that I can actually live in when I am in Chicago. Additionally if I need to come to Chicago for any reason I won't be able to feel comfortable to take care of business because I will be at my mom's house..and that shit is wack lol. Lastly I can't really entertain any future businesses investors or partners at my mom's place so it would make sense for me to at least have a place for that...companies with company headquarters look more legitimate. I would have less of a down payment as well and could have the building paid off a whole lot sooner. But if I get the more expensive building I could also charge more for rent which would be a parallel situation of me being able to pay off the property sooner. I need to crunch some numbers a bit more and figure out a financial strategy for both plans and then weigh which one is more viable. I am going to give my cousin Taji a buzz and see what he thinks about my ideas since he already has 4-5 properties in Chicago and has a property management company.

My next main focus will be on acquiring my down payment and any financial assistance I can get from the City of Chicago, the neighborhood of Bronzeville, the State of Illinois, &/or Gov't...ahhh decisions.

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