All Forum Posts by: Account Closed

In a short sale in Illinois, the borrower would formally designate the property as for sale and classified as a potential “short sale/subject lender” deal when he or she puts the property for sale on the market. Once the borrower decides to move ahead with a short sale, the borrower/seller would contact their lender to complete an application for a short sale. While there is no guarantee that the lender will accept the application for a short sale to resolve the mortgage loan, it’s an important legal maneuver to help mitigate the financial damage of defaulting on your mortgage. If a lender chooses to accept the homeowner’s application, it will issue a short sale letter and the sale can proceed. A short sale letter outlines the approval of sale and the borrowers release from the mortgage loan for a lesser amount than what is due.

Lenders and borrowers alike prefer short sales because these transactions allow them to avoid the lengthy and costly measures of proceeding with foreclosure. Borrowers benefit from short sales as well, as they are able to pay off their debt for less than what was owed and avoid the devastating effects to their credit that a foreclosure would inevitably cause. However, there are many potential legal pitfalls to selling your home in a short sale, so be sure to get advice from a real estate attorney in your area.

I agree with the comments stated above --- it is fine to have the tenant be responsible for the lawn care and snow removal. But it is important that you communicate it well and have it written into the lease/rental agreement. Happy to answer more questions.

It’s easy to believe that hiring a professional just means another fee you have to pay before you can actually start investing in your investment. However, spending money on good legal help can help you save money in the long-run. A personal legal representative can help you mitigate or avoid the lion’s share of the closing costs on your new property. They may help you avoid going into your personal pocket to pay closing costs altogether, and the benefits of hiring an attorney come clearly into focus once the complexity of the closing process sets in. This is particularly true in my home of Chicago, Illinois, where closing costs average higher than many other places in America. 

Additionally, as mentioned above, laws are so specific to the area that if you are unfamiliar with the local regulations, you are best off consulting a professional.

As seen in the comments above, the confrontation on this issue isn't always pleasant, but it is not impossible to have a successful transition. 

I agree with @Justin Abdilla's approach as these situations can be emotionally driven and may become legally challenging. Consulting with a local attorney could be beneficial.

In situations where you may wish to evict the tenant immediately, the eviction process can still be lengthy and cumbersome. There are many legal formalities that must be observed prior to eviction. 

In my home state of Illinois, a landlord has the legal right to evict a tenant for something such as non-payment of rent or violating the rental or lease agreement. If a tenant is to be evicted for not paying rent or failing to pay rent on time the landlord is required to give the tenant five days’ notice prior to instituting eviction. If the tenant still does not pay the past due rent within five days, you can proceed in bringing an eviction lawsuit. If you are looking to evict based on a tenant violating the rental or lease agreement, you must give the tenant ten days’ notice to move out of the rental space. If the tenant fails to do so within 10 days’ time, you may initiate the eviction lawsuit.

To begin the eviction lawsuit process, proper notice must be served on the tenant. Five days after notice has been served, the complaint and summons may be filed with the court. You will be given a return date which will likely be the first court date. However, the sheriff must serve the tenant with a copy of the complaint and summons. If the sheriff is unable to do so, this further complicates things as a special process server will need to be appointed and your return date will be postponed.

Eventually, the first court appearance will happen. You may be able to obtain a default judgment if the tenant or a legal representative for the tenant does not show up. If the tenant and/or his or her attorney does show up, they may request a continuance, which would be a postponement of the eviction proceedings, or they may even request a jury trial. There will likely be more than one court appearance. You may be able to reach a settlement with the tenant or a jury trial may be needed. Ideally, an order of possession will be the result of these legal proceedings.

Upon receiving an order of possession, you will give this to the sheriff so they know it is okay to remove the tenant.

Again, lengthy and cumbersome and full of legal formalities.

In Illinois, the statehouse passed SB1872 just last year, which amends the Illinois Real Estate License Act to require brokers licenses for wholesale transactions. A Broker’s license is required if an individual intends to wholesale more than one deal a year and they will be subject to the rules and regulation of the Illinois Department of Financial and Professional Regulation. It starting to happen across the country, and smart investors must be ready to adapt.

A good real estate attorney will maintain relationships with trustworthy title companies, escrow agents, brokers, etc. so your local attorney's office is always a good place to start looking for ways to stay compliant and save money on your wholesale transactions. Hiring an attorney can be both the safe choice and the profitable one - whether it's closing costs or taxes, we almost always end up saving our clients more money than it cost them to hire us in the first place.

For any person, or entity, engaged in the business of Wholesaling real estate, you cannot wholesale more than one deal a year. A Broker’s license is required if an individual intends to wholesale more than one deal a year and they will be subject to the rules and regulation of the Illinois Department of Financial and Professional Regulation.

lIllinois revised the Illinois Real Estate License Act of 2000 back in August, which includes a change to the definition of a Broker. The new definition includes:

“Whether for another or themselves, engages in a pattern of business of buying, selling, offering to buy or sell, marketing or sale, exchanging, or otherwise dealing in contracts, including assignable contracts for the purchase or sale of, or Buys, sells, offers to buy or sell, or otherwise deals in options on real estate or improvements thereon. For purposes of this definition, an individual or entity will be found to have engaged in a pattern of business if the individual or entity by itself or with any combination of other individuals or entities, whether as partners or common owners in another entity, has engaged in one or more of these practices on 2 or more occasions in any 12-month period”

Be sure to familiarize yourself with the entirety of the new regulations, as there are important changes to Wholesaling that matter to how an individual engages in the business.

Illinois revised the Illinois Real Estate License Act of 2000, which includes a change to the definition of a Broker. The new definition includes:

“Whether for another or themselves, engages in a pattern of business of buying, selling, offering to buy or sell, marketing or sale, exchanging, or otherwise dealing in contracts, including assignable contracts for the purchase or sale of, or Buys, sells, offers to buy or sell, or otherwise deals in options on real estate or improvements thereon. For purposes of this definition, an individual or entity will be found to have engaged in a pattern of business if the individual or entity by itself or with any combination of other individuals or entities, whether as partners or common owners in another entity, has engaged in one or more of these practices on 2 or more occasions in any 12-month period”

For any person, or entity, engaged in the business of Wholesaling real estate, you cannot wholesale more than one deal a year. A Broker’s license is required if an individual intends to wholesale more than one deal a year and they will be subject to the rules and regulation of the Illinois Department of Financial and Professional Regulation.

Be sure to familiarize yourself with the entirety of the new regulations, as there are important changes to Wholesaling that matter to how an individual engages in the business.

@AG Gupt 

Thanks so much for sharing your insights - and you're absolutely right with respect to the regulatory creep in licensing requirements for wholesale transactions. Here in my home state of Illinois, the statehouse passed SB1872 just this year, which amends the Illinois Real Estate License Act to require brokers licenses for wholesale transactions. It's happening across the country, and smart investors must be ready to adapt. 

A good real estate attorney will maintain relationships with trustworthy title companies, escrow agents, brokers, etc. so your local attorney's office is always a good place to start looking for ways to stay compliant and save money on your wholesale transactions. Hiring an attorney can be both the safe choice and the profitable one - whether it's closing costs or taxes, we almost always end up saving our clients more money than it cost them to hire us in the first place.

@Brie Schmidt - I'm so glad your experience ended with a positive resolution, and yes background checks can be very useful tools when it comes to due diligence in any financial arrangement. This is true even for people within our personal and professional networks - there's no telling how trustworthy they are with money without looking into their backgrounds. While we all would rather be able to trust people, I've seen situations where not-so-savory tenants and real estate flippers are able to explain financial issues in their backgrounds to the landlord or investor's satisfaction - bad partnerships, spouses, roommates, things like that - just to turn around and run off owing large sums of money. Even though it took years and lots of legal battles, I'm so glad you were able to get your money back!