Apostal Group

Tips for becoming an owner occupied investor: An interview with our clients Taylor and Justin Niko Apostal 06/19/15


We have a lot of clients who use real estate to improve their financial portfolio in a variety of ways – refinancing their home, investing in additional real estate to diversify their investments or buying a two- or three-flat so they can live in one unit and rent out the additional units to cover mortgage payments. This last example is called an owner occupied investment and it is a great option in Chicago, where two- and three-flat buildings are ubiquitous and can often be bought cheaply if the buyer is willing to put some elbow grease into fixing them up.

Such was the situation of our clients Taylor and Justin, who bought a 4-bed, 3-bath two-flat in Bridgeport last year. After fixing up the second unit themselves (the building was over 100 years old!), they are now happy owner-investors who are willing to share their tips and tricks for others who may be interested.



The renter’s unit after Taylor and Justin spent several months on renovations.

Apostal Group: You went out with Kim and looked at lots of possible two-flats before choosing this one. What were you looking for?

Justin: The first floor was recently renovated, so that was move-in ready for us. But the other unit was a complete project. That’s what we were looking for. We weren’t in a position to move into a construction zone ourselves, but we knew we could fix up a rental unit. Compared to a [complete full-building renovation], this was our ideal situation.

Taylor: And the location is pretty prime. It’s perfect for what we were looking for. There’s a really great backyard on the property. It was in pretty rough shape when we moved, but we’ve got a nice garden back there now and a space for the dog.


Taylor and Justin were looking for a project, and this rental unit was just what they were looking for.

AG: How long were you looking before you found this property?

J: We started in December, 2013, and then we found this place in mid-February 2014. We looked at about 20 different properties during that time. What we were looking for was really unique. We did a lot of research online before we went out and looked in person.


The living area of the renter’s unit when Taylor and Justin bought the two-flat.


According to Taylor, the carpet smelled terrible and was one of the first things to go.

AG: Describe the “before” state of the upstairs rental unit when you bought the property.

J: It hadn’t been cared for, but structurally it was still sound. Everything inside the walls looked good, so it was a lot of painting, floors, tiles, cabinets, stuff that we could do a lot of on our own.

T: It smelled so bad up there when we first got it. We ripped out the disgusting carpet. It was really sad to see how houses are kept up sometimes.

J: We ripped everything out and then gutted the kitchen and gutted the bathroom. We had really nice hardwood floors underneath the carpet. We ripped up all the tiles in the kitchen and bath and redid those.


The kitchen, before.


The kitchen, after.

AG: What style were you trying to achieve with the new elements that you chose for the unit?

T: When it came to materials, we wanted something as simple as possible. We wanted to save money, and we tried to discount shop as much as possible. But materials can get ugly really quickly at that price point. I ended up choosing stone tile that was white and didn’t look like fake tile.

J: My main goal was to reuse. If it could be saved by labor, rather than buy something new, I wanted to do that.We kept the hardwood floors and the hardware on the doors, so you know the place is old, and the trim is really vintage. It really kept the aesthetic with the old place, but with modern conveniences, and a modern look. The hardware on the doors look original, but the mechanics are are all new, the doors open and close and lock like modern doors,

T: I think I probably erred more toward the side of what I like personally. But it was pretty universal. I can’t tell you how many apartments I’ve looked at that are gut rehabs done really poorly. Doing the extra time, putting a little extra money into details… We had a type of renter we were going for, which was at the higher end. We figured it would eliminate problem tenants. So the look we were going for was very sophisticated.


The bathroom, before.


The bathroom, after.

AG: Once the renovations were complete, how did you go about finding a tenant?

J: We just placed a Craigslist ad with a good pictures and a nice description, and we had so many people respond the first day. We had a ton of offers. One of them went all the way through the process and we selected them, and then they turned us down. But the day they turned us down, we had 6 showings, so we were able to offer it to the next person on the list immediately.

T: This all happened in 3 days time. We posted the ad on a Sunday night and by Thursday we had a tenant.


AG: How did you end up choosing Bridgeport to pursue your owner occupied investor plan?

J: We were looking for a neighborhood we could afford and still be close to the Loop and be more up-and-coming. I think the north side is more unaffordable.

T: There’s something about this [Bridgeport] community. The businesses here are really dedicated to the area. It has a different feel. It’s all families and now younger couples are starting to move in.

J: And it was more affordable here. To get what we got [in Bridgeport] on the northwest side, we would have had to go so far west that I think it becomes inconvenient to public transportation.



AG: What surprises did you encounter in the process of rehabbing the rental unit on your property?

J: I don’t think anything was ever easier than I thought. Everything takes more time than you think it will. By the end of any project you’re moving faster, but at the beginning, it’s slow.

T: We moved in in April, and we anticipated we’d have it ready for fall rentals. But we didn’t get started over the summer, and you’re trying to plan timetables for thins we’d never done before. Boy were we wrong.

J: We were able to use our work experience well in the project — me being an engineer, and Taylor’s a project manager so she has a great sense of production — we were able to use our job experience to our advantage. And we had helping hands of friends that would help. Drywall and woodworking/carpentry. Find someone else.


AG: What advice would you give someone who is considering a similar project?

J: There are so many times I tried to do something without the right tools and then I’d break down and go get the tools I needed. You kind of have to get in the mindset that you’re going to need to spend money to make money.

T: Have that second person for the second opinion. Be a little bit flexible with the budget and a little bit flexible with the timeline. If you’re in a time crunch, you’re going to have to hire more people to help you. If you have the comfort to take your time with it, you’ll save money. We kept really detailed track of all our expenses, ti’s nice to have a baseline for materials, it’s nice to have that knowledge now for future projects.

J: The contractors we did hire, you have to know what they’re doing and watch them the whole time. Sometimes they’ll try to cut corners, so that’s where there’s definitely an advantage to knowing how things go together. Ask people for contractor recommendations. Know what you want, and do your research.


AG: Have you met your financial goals with this project?

J: Yes, definitely. About 75 percent of our house-related expenses are covered by the rent from the rental unit — that includes our mortgage, property taxes and insurance.

T: We put a lot of thought into where to set the rent. We had a number that we didn’t want to fall below. We were a little nervous pricing it what we did. It was tricky to find a comparable unit in the neighborhood; nothing matches the square footage and the upgrades we had put in, so we had to cobble together information to make that decision. But in the end, I think we found just the right balance.

AG: Any other thoughts?

T: [AG Vice President of Sales ] Kim [Becker] showing us around! She was amazing, she would knock down doors to get us into the places we wanted to see. Kim was wonderwoman of the real estate world. I feel like most realtors would rather show poeple a lot of nice condos all in the same buiding. We went and saw some really… interesting properties. The hunt can be kind of discouraging. But Kim was amazing.

J: Patience is my biggest lesson. Have patience.


Thanks, Taylor and Justin! Congratulations on your successful real estate owner occupied investment venture.

If you’re interested in learning more about owner occupied investor opportunities, we’d love to discuss them with you! Contact us.