Deal snapshot
| Location | Bridgeport, Chicago, Illinois |
| Property type | 60609 brick two-flat (owner-occupied upper, vacant lower) |
| Loan type | Hard money bridge → DSCR no-seasoning refi |
| Loan amount | $331,200 bridge (90% LTC) |
| Close time | 9 business days |
Investor challenge
A south-side operator with five prior Cook County closes needed to buy a Bridgeport two-flat before an out-of-state heir relisted with a conventional buyer. The upper unit had a long-term RLTO tenant at below-market rent; the lower unit was vacant and needed a full gut. Banks wanted 12-month seasoning on purchase price before lending against renovated value — capital that should fund the next 60609 acquisition would have sat idle for a year.
Jaken’s solution
90% LTC at 10.25% IO with 14-month term and milestone draws aligned to electrical sign-off, basement waterproofing, and lower-unit CO. RLTO notice planning and Cook County triennial tax stress (+15%) were modeled in the hold exit before term sheet — not after appraisal.
Outcome
Stabilized gross rent: $2,650/mo ($1,350 upper RLTO tenant + $1,300 market lower)
Appraised value at refi: $385,000
DSCR refi: 75% LTV → $288,750 @ 8.35% — recovering ~$112,000 of invested capital for the next Bridgeport or McKinley Park file
Chicago hub: hard money lenders Chicago · DSCR loans Chicago
Acquisition
Purchase: $268,000 · Day 9 close
Hard money: 90% LTC · 10.25% IO · 14-month term
Rehab scope
| Item | Cost |
|---|---|
| Lower-unit gut (kitchen, bath, LVP) | $38,500 |
| Electrical panel + partial re-pipe | $22,000 |
| Basement sump + waterproofing | $14,500 |
| Tuckpointing + rear porch to code | $12,000 |
| RLTO legal notice + compliance buffer | $8,000 |
Total rehab: $95,000
Hold exit (executed)
- Gross rent: $2,650/mo
- Appraisal: $385,000
- DSCR refi: 75% LTV → $288,750 @ 8.35%
- DSCR ratio: 1.08 at modeled RLTO-adjusted expenses
Why Bridgeport beat a North Side BRRRR here
The sponsor’s edge was basis. A comparable Logan Square two-flat would have required $80K–$100K more on acquisition with similar rent — compressing DSCR below 1.0 at 75% LTV. Bridgeport’s $330K all-in against $2,650/mo gross cleared the no-seasoning refi threshold while RLTO overhead stayed manageable on a single occupied unit.
Takeaway for Chicago investors: model RLTO and Cook County tax drag in the DSCR exit before you offer — Bridgeport wins when hold math survives compliance, not when flip ARV looks good on Zillow.
Project timeline
| Phase | Timing |
|---|---|
| Hard money close | Day 9 |
| Lower-unit rough + electrical sign-off | Month 2 |
| Basement waterproofing complete | Month 3 |
| Lower-unit CO | Month 7 |
| RLTO upper tenant remains (below market) | Ongoing |
| DSCR refi wire | Day 47 post-CO |
Total calendar: ~8 months acquisition to permanent debt — vs 12+ months bank seasoning on purchase price.
Draw schedule (milestone-based)
| Draw | Release | Trigger |
|---|---|---|
| 25% | $23,750 | Demo + rough plumbing signed off |
| 35% | $33,250 | Electrical panel + basement waterproofing |
| 25% | $23,750 | Lower kitchen/bath install |
| 15% | $14,250 | Lower-unit CO + tuckpointing punch |
No draw released on upper-unit cosmetic work — RLTO tenant occupied; scope stayed on vacant lower until CO.
Flip vs hold at LOI
Modeled $415K ARV flip after lower rehab netted ~$38K after 9-month carry — viable but inferior to $288,750 refi recovering ~$112K deployable capital. Sponsor held upper RLTO tenant intentionally; turnover would have added $200/mo gross but 90+ days delay.
Cook County tax at refi
Appraisal $385,000; underwriter stress-tested tax at +15% triennial reassessment — $620/mo vs seller bill $540/mo. DSCR dropped 0.04 vs pro forma using seller tax; still cleared 1.08 at 75% LTV.
Operator lessons
RLTO counsel: $8,000 line included notice drafting and heat-obligation audit on upper tenant — not optional on Bridgeport files with owner-occupied history. Insurance: Landlord policy on 60609 brick bound at $1,850/yr before refi — underwriter required proof. Entity: Illinois LLC vesting matched deed within 14 days of close — standard Jaken Chicago file hygiene.
Next acquisition: Sponsor redeployed ~$112K extracted equity into McKinley Park two-flat under same hard money relationship — Chicago BRRRR strategy recycle pattern.
Lower-unit scope detail
Lower gut included new 100-amp subpanel, cast-iron stack lining, and sump with battery backup — $14,500 waterproofing line non-negotiable on 60609 basements with prior seepage. Skipping waterproofing would have failed insurance bind at refi and triggered appraisal condition on $385K value support. Heir sale closed with as-is inspection waiver — sponsor priced unknown plumbing into rehab reserve before Day 9 wire. Lower-unit market lease signed 11 days after CO; 1007 ordered with both leases attached — standard no-seasoning Chicago file package. Sponsor’s five prior Cook County closes qualified for 90% LTC tier — first-time Bridgeport operators often see 85–88% on identical block product.
Related
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