Flippers/Lien Waivers in the Chicago: How to make life easier?

[Frank Ponticelli]

For flipping investors in the Chicagoland area:  The more you know about lien waivers and the process, the better your flip will go and the quicker you will get your returns.  This is not intended as legal advice from me, but a general guideline on how to approach flips and lien waivers.

The number one issue title companies are experiencing is the increased number of mechanics liens tied to flips.  Title companies do not like mechanics liens as it costs them money, which results in making the flipping process more difficult.  Or does have to be?  Here are few tips on how to avoid this problem on your flips:

1) Create a file folder for you flip (both electronically and in paper form), so you get and maintain the proper documents stated below.

2)  Draft a summary general contractor (if you are the GC) plan or have your GC prepare a plan on what work will be done before you start it.

3) Identify and create a list of all subcontractors that will be used.

4)  Identify all materials that will be needed or used for your flip.

5) Prepare all lien waivers for all subcontractor and materials either before the process starts (this is ambitious - but is a great idea)  or at the time of paying your subcontractors.  

6) Lastly, get all lien waivers to your attorney prior to the actual closing.  DO NOT WAIT UNTIL THE DAY OF CLOSING, you will not be happy as you money will be held up.  The more time your attorney has to review and get approved the lien waivers with the title company the better the matter will be for you and your money.

Any additional recommendations or comments to the above is welcomed, as I only like to make the process easier for you and my own client's.