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Author: Mark Ainely | Partner GC Realty & Development & Co-Host Straight Up Chicago Investor Podcast
I hopped on with Tim Harstead again and we realized we’ve basically turned this into a weekly habit. Six or seven weeks in a row now, depending how you count it. Either way, we’re showing up.
This one was a true “landlord grab bag” episode. We started with a simple investor question, is there a better time of year to buy or close, and that turned into real tactics on mortgage timing, inspections, and why the final walkthrough is not optional. Then we got into insurance and how I think about deductibles and claims, plus a couple stories that still make my stomach turn.
After that, we touched a Chicago tax reduction program for buildings with seven or more units, a wiring scam story that proves why you can’t take anyone’s word for “gut rehab,” some CHA news that looks bad no matter how you slice it, Tim’s March Madness neighborhood bracket, what cash flow actually looks like today, how I think about nonconforming and illegal units, and a spring warning that landlords underestimate every single year: lawn care is about to get more expensive.
What we talked about in this episode
Is there a “best time” to buy or close on a property?
Tim’s take was that seasonality can help a little. Winter can mean a weaker market and sometimes better deals.
My favorite angle is more tactical: I like timing the closing date so I can push the first mortgage payment out as far as possible. If you close around the 6th or 7th of the month or later, you can often delay that first payment until the month after next. It feels like a “free month,” even though you’re paying prepaid interest at closing. Still, cash flow timing matters.
Then I added my own twist. If I’m buying in winter, at least I know the heat works. If I buy in August, it’s easy to ignore an old boiler until the first cold snap, and then you find out the parts don’t exist anymore and you’re stuck.
Inspection timing: rain reveals the truth
I said it straight: if you can time your inspection right after rain, you can catch a lot of things that won’t show up on a sunny dry week. Roof leaks, basement seepage, window leaks, sump pump issues. If you can’t time the inspection, go back to the property while you’re under contract after a heavy rain. I shared a story where I did that and found the sump pump broken with water in the basement a week before closing. Seller had to fix it.
Tim also shared a summer trick if you want to test heat when it’s hot out. He literally pulled a thermostat off the wall, cooled it down in the car, and forced the heat to kick on. It’s ridiculous, but it works.
Final walkthrough is not optional
I said this with my full chest: do not skip your final walkthrough the day of closing or the night before, especially in rougher areas, but honestly anywhere. I’ve heard too many nightmare stories.
Tim had two that beat mine.
Tenants were supposed to be out, the buyer closed, and the tenants were still there.
Someone closed and the house burned down the next day. The city demoed it within 48 hours. The buyer showed up to a vacant lot. The worst part was they didn’t have insurance bound yet.
That’s the kind of story that changes how you operate forever.
Insurance: it’s expensive, but it’s still worth it
We went deep on this because I keep seeing terrible advice online.
I said it clearly. Insurance is one of the few things that is still worth paying for, because the alternative is catastrophic. Then I shared a wild personal example where a building burned down and the insurance payout was dramatically higher than the purchase price. I’m not saying that as a “win,” I’m saying it as proof that you want coverage in place before anything happens.
We also talked claim strategy. I told people to stop treating insurance like a maintenance account. If you file claims for small stuff, you’re asking to get dropped or priced out. I shared how we handled insurance on a large portfolio with a big deductible so we were basically self-insuring for smaller problems and only using insurance for major events.
Tim added an important industry detail. Carriers are tracking the person, not just the property. You file a claim on one house, it can affect pricing on everything you own. We also talked about how some carriers are changing how they insure LLCs, because they don’t want claims history hidden behind entity names.
CIC is a real resource, especially for newer landlords
I gave a shoutout to CIC (Community Investment Corporation) as a lender for five-plus unit buildings, and Tim added something I agree with completely: their landlord training class is legit. I’ve taken it twice. Tim sends his team through it, and I do the same.
A property tax reduction program for 7+ unit buildings
I brought up a program investors should look into if they have seven or more units and have done substantial rehab. The way I explained it, you may be able to reduce property taxes for the whole building, but there’s a requirement to keep two units affordable under AMI guidelines. I also mentioned that “affordable” under AMI is often higher than people assume, especially if you have something like a garden unit that naturally rents lower.
Tim added that energy-efficiency related upgrades can count toward qualifying work, like windows, boiler systems, electrical upgrades, and similar building improvements.
“Gut rehab” lies and old wiring scams
We talked about how investors get burned by contractors and sellers who claim everything is new, but it’s not. Tim shared a scenario where cloth wire or old wiring was still in place even after someone claimed a gut rehab.
I shared one from our side where a client insisted the building was a full gut rehab. When we opened things up, we found wiring from the 1940s. The investor thought they bought “brand new,” but they bought lipstick on a pig.
CHA fraud and what that could mean for the program
Tim brought up a post about CHA Commissioner Deborah Parker allegedly misreporting income while receiving benefits. We talked about how that looks like a conflict of interest at minimum, and we also talked about how it signals increasing scrutiny.
My bigger point was this: people have historically said Section 8 is “federal, so don’t worry,” but if the federal side is looking harder, it makes you wonder what program changes could happen in the next few years.
We also talked about how CHA itself has had serious operational issues, including units sitting vacant and shutdowns tied to issues like lead-based paint. And the real tragedy is it hurts the people who are supposed to benefit from the program.
March Madness, but make it Chicago investing
Tim is running a Chicago Investor March Madness bracket with all 77 Chicago neighborhoods. People can fill out their bracket and compete for a Home Depot gift card, and then they’ll move into weekly voting so the market can see what neighborhoods investors believe in most.
We talked through a few matchups, like Avondale versus Logan Square, Lake View versus Lincoln Park, and Belmont Cragin versus Hermosa. The point was not “one answer,” the point was understanding what you’re trying to do. Cash flow versus equity. Stability versus upside.
Cash flow is harder today, and that’s not the real story anyway
Someone asked if we’re seeing fewer multifamily listings that actually cash flow outside of “war zones.”
My take is simple. If you go back to 2019, people weren’t thinking about cash flow the way they got used to thinking about it in 2021 and 2022. A lot of deals don’t cash flow on day one, but if you run the building well, raise rents over time, and stabilize, it can cash flow in two or three years.
Tim and I also agreed that cash flow can disappear fast if you’re not accounting for CapEx. You can “cash flow” on paper and then lose it all on a furnace, roof, boiler, or something else you knew was coming but didn’t price correctly.
My longer-term view is this: most people don’t regret buying decent property 10 years later, as long as they didn’t overpay and they didn’t buy a lemon.
Illegal units and nonconforming units: I’m not playing with obvious death traps
We got a question about nonconforming units and illegal units.
I explained my stance like this: I’m not pulling zoning on every property before renting it, but if someone comes to me with a basement that has six-foot ceilings, no windows, no proper exits, and it’s obviously unsafe, we’re not doing it. I’m not putting myself or anyone else in a position where someone could die in a fire because there’s only one way out.
We also touched on the ADU rollout expanding beyond the pilot. My bigger point was the process is still expensive and not simple, and right now the math often doesn’t math for owners who would spend a lot to legalize a unit just to get a small bump in rent.
Spring is coming, and lawn care is going to get more expensive
Tim gave a warning I agree with: you don’t pay landscapers to cut your lawn, you pay them to drive to your house. If gas spikes, landscaping prices spike.
I added that for a typical Chicago lot, it costs a vendor $35 to $40 just to show up. Then the actual mowing is the easy part.
We also talked about the landlord-friendly solution: convert small grass patches into mulch, rocks, or artificial turf. Less cost, less hassle, less risk.
And yes, risk matters. I shared we’re defending a lawsuit tied to a trip hazard in a yard near a cleanout. It’s a ridiculous claim, but it’s real life, and anything you can do to reduce “stupid risks” helps.
Questions We Answer in This Episode
Q: Is there a better time of year to buy or close on a property?
A: I don’t think there’s one perfect season, but winter can mean less competition. I focus more on closing timing to delay my first mortgage payment and closing in winter so I can confirm the heating system is working.
Q: What’s the best inspection timing tip you can give?
A: Try to inspect right after rain, or go back while you’re under contract after heavy rain. You’ll catch roof leaks, basement seepage, window leaks, and sump pump issues you might miss on dry sunny weeks.
Q: Why are you so serious about the final walkthrough?
A: Because things change fast. Tenants might not actually move out. Pipes can disappear. Damage can happen. Once you close, the seller has no obligation. I do the walkthrough the day of closing or the night before.
Q: When should landlords file insurance claims?
A: For major events, not for small repairs. Filing small claims can get you dropped or priced out, and insurers track your claims history across properties, not just the one building.
Q: How do you handle illegal or nonconforming units as rentals?
A: I won’t rent anything that’s obviously unsafe or a death trap. If it can’t pass a basic safety and common-sense test, it’s a no.
Show Notes and Timestamps
00:16 Chicago Landlord Secrets week six or seven and spring weather fake-outs
01:16 Is there a better time of year to buy or close on a property
01:57 Timing closings to delay the first mortgage payment
03:35 Why winter closings help you confirm the boiler or heat works
04:24 Forcing heat to kick on in summer using a thermostat trick
05:11 Scheduling inspections after rain to catch leaks
06:17 Why you must do the final walkthrough before closing
07:46 Horror story: closing, then the house burns down and gets demoed
09:43 Why insurance is still worth it and why not to file small claims
11:15 Using high deductibles to self-insure small losses
12:47 CIC resources and their landlord training class
14:21 Property tax reduction program for 7+ units with rehab work
16:19 “Gut rehab” scams and finding old wiring in supposedly updated buildings
18:02 CHA board and voucher fraud discussion and why scrutiny may increase
23:57 Chicago Investor March Madness bracket and neighborhood investing debates
Key Takeaways for Chicago Landlords
I time closings to delay my first mortgage payment, but I also like winter closings because heating issues show themselves.
Inspections after rain catch problems that dry weather hides.
Final walkthrough is non-negotiable, because once you close, you own every problem.
Insurance is for major losses, not small repairs, because claims history follows the owner across properties.
CIC is a strong resource, and their landlord class is worth taking even if you’ve been doing this a long time.
“Gut rehab” claims mean nothing unless you verify wiring, permits, and actual work quality.
Illegal units are not a game if safety is compromised, I won’t touch obvious death traps.
Gas prices push landscaping prices up, and low-maintenance landscaping can pay for itself fast.
Guest Information
Mark Ainley
Founder & Partner – GC Realty & Development
Podcast Co-Host – Straight Up Chicago Investor
Tim Harstad
Founder – Chicago Style Management
Because finding good tenants and property management shouldn’t feel like online dating.
Dear Investor,
If you are an investor in either the city or suburbs of Chicago, I would love to speak with you about how we can help you on your real estate journey. At GC Realty & Development LLC, we help hundreds of Chicagoland real estate owners and brokers each year manage their assets with both full service property management and tenant placement services.
We understand that every investor’s goals are unique, and we love learning about each client’s individual needs. If there is an opportunity to help you buy back your time by managing your rental property or finding quality tenants, please check us out.
Best Investing,
Founder, Partner, Podcast Co-Host, and Investor
