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United Mechanic Builds Rental Empire, Keeps Day Job
Coleman's pride and joy is a once-abandoned 15-unit rental building that he and partner Heath Ballard purchased for $150,000 seven years ago at 89th and Ada on the South Side. It's now a gem of the community and lists for $900,000.
While they've earned the sweat equity, they continue to keep their jobs at United Airlines. "There's a difference between being a real millionaire and being rich on paper," Coleman said. "You don't get paid until you cash in at the closing table to collect on the sweat equity."
Coleman's strategy was to tap equity from smaller properties, and borrow from friends, family, private investors and partners, and go to special financing programs for community development, like CIC. He also cashed in a portion of his 401(k) to secure and rehab larger buildings.
There's also risk in owning real estate, he admits.
"When I bought the four-unit at 73rd and Michigan, it was more of a headache than you can imagine," he said. "The eight-flat was my introduction into the big leagues. At $225,000, I had to borrow from everywhere to come up with the 20 percent down payment -- about $40,000. I almost bankrupted my family. My brother thought that it was way too much work. But the building later started putting out $800 to $900 a month income -- and that was cool. My brother has since quit his job to manage our buildings."
With 200 rental units in 11 residential properties on the West Side, businesswoman Johnnie Herron is passing on a legacy to the family's next generation. All three children -- Melanie, 50, Lori, 38, and Lawrence Jr., 48 -- are actively involved in the property management enterprise she began with her late husband more than a decade ago.
"They have caught the gene," Herron said. "The buildings are something the children can perpetuate and work for themselves."
The Herrons initially dabbled in real estate to supplement their regular 9-to-5 jobs. She was a corporate sales manager; her husband, Lawrence, a Chicago police sergeant. They also owned a restaurant and convenience store. During an "ah-ha" moment, they tapped each other on the shoulder. "We realized that we were spending more time on our jobs than building something." They began concentrating on restoring distressed properties and providing more affordable housing. "My husband and I were both dreamers. We saw what was and envisioned what it could be."
