All Forum Posts by: Robert D.

or maybe the best way is to count number of recorded RELEASEs and MORTGAGEs

if the owner refinanced the place couple of times and has 1 mortgage only the number of "mortgages" will always be higher than number of "releases" by 1. if they have couple of mortgages than the number will be at least 2. correct ?

O and E report (ownership and encumbrance report) from a title company--> what else would they be looking at other than recorded documents posted online ? i need to understand what the recorded documents mean and can determine the status of the mortgages then ....so I guess the next step would be to have a couple of working sessionswith an attorney ...

how would I determine which mortgage they actually foreclosed ? the bidding starts with an amount that does not tie to any mortgage balance or fraction there of

the auction is the judicial sales ..plaintiff (bank) is the winning bidder most of the time. sometimes 3rd party bidder wins. this is IL specific. I understand I might be responsible for mechanical liens or back taxes or past due HOA assessments but I have a hard time to understand if I might be responsible for other mortgages as well. in the attached picture you will see the flow of recorded documents. asking attorney to do a title check for every property is not possible. the below is public information that can be looked up by anyone

Lets say you are sitting on auction and you entered the winning bid. What happens if there were 3 mortgages on the property with 3 different banks ? kind of unusual situation but there are 80/20 mortgages from back in the day when they used to do that... Does it mean that you need to go thru the same process with all lien holders ? 

thanks - this is what the "redemption" booklet reads:

If your taxes have been sold at the tax sale, you must pay your
delinquent tax + monthly interest + tax buyer interest + fees to
the tax buyer to regain clear title to your property.
The interest rates for taxes
sold to a buyer are very high
— as much as 36% interest per
year. But if you don’t pay your
late taxes, the tax buyer can
eventually gain ownership of
your property.
Delinquent Tax
+ 1.5% Monthly Interest
+ Tax Buyer Interest
+ Fees
Total Cost of Redemption

so I wonder what those tax buyer interest fees are ...looks like another fun visit dtown ahead of me.

I have a questions regarding the process. Lets say that I bid on the outstanding tax and I am successful in doing so, meaning I bid close to 0% and I won, lets say the outstanding tax amount was $150 (tax for parking space for example). I will receive certificate of purchase. I will have to pay additional fee of 10+100+80+10 = $200 per PIN. Then I will start the process to obtain the tax deed. I will have to pay county fees to file various petitions, then I will have to pay attorney fees to do everything correctly. So lets say I am out $2000 to process that one PIN. What happens if the owner wakes up and decides to redeem the taxes ? all I will receive back is the original tax amount correct ? the owner will not refund anything related to attorney/filling fees ? is that correct ?

Statutory fees applicable to each purchased delinquency include: (a) $10.00 Publication fee (35 ILCS 200/21-135); (b) $100.00 Sale in Error Fund fee (35 ILCS 200/21-330); (c) $80.00 Indemnity Fund Fee (35 ILCS 200/21-295(a-5)); and (d) $10.00 Automation fee (35 ILCS 200/21-245).

If you acquire a small parcel of land in residential part of the city and you want to put a sign on that parcel that will display advertisement of any legal businesses e.g. “we buy houses” or “New Printing Shop Just Opened” …would you need some sort of variance of a land use from the city ? do you have to convert the small parcel into commercial parcel ? anybody has any experience with that ? thanks for your help

My experience in Chicagoland area :

-in my opinion there is no such thing as farm area. With MLS being null and inventory low you need to look further to find deals (15 mile radius ? maybe even 20) not many realtors with 30yrs experience can claim they are experts in the whole area. All it takes is to log in to fema website and check the address for history of flooding, that's what the underwriter will do as well ? - that's 4 minutes alone ;-))..that can either save or kill the deal. 4 minutes can save you 1K …I think its better than GEICO ?

-(I can replace a main line for $800) ;-)) well then I welcome you to the city of Chicago …it will be a great reality check ..especially if you have to find the box on the other side of the street. The city union workers will gladly pocket $800 for the half day of work ;-) . I was providing financing for such a brave flipper some time ago …the payments luckily keep coming (must be good collateral ;-)

-"I don't care if mice have chewed through wires (an electrician is $50/hour)"- and how many hours do you think it will take a licensed electrician to rewire the whole 2story, 4BR, 3BA bungalow, with unfinished basement built in 1920 ? this is not the cookie cutter from 70s SFR …those are real deals ..once you get to that basement you may never get out of there with $2 in your name ;-))

-“I don't care if there are plumbing leaks (my plumber works for $50/hour)”,- again ..so we know that plumbing leaks …great …are we talking about replumbing the whole property and bringing to the city code or ..or maybe leaving the galvanized plumbing and just adding missing copper, is it allowed ? the drain line 3 or 4 inches ? per 2 or 3 bathrooms ? is check valve necessary in the basement for sewage backup ? (city codes vary greatly by municipalities here) and there is NO way you will know every city codes of every municipality in 20 miles radius. Before I sign a contract, I usually talk to my favourite 2 pro GCs with 20/25yrs of experience in rehabbing ..and they go “I have no clue, I worked in this city 2yrs ago ..something might have changed since then I need to check on that” AND this is the right way to go ! this is what I expect them to say and that’s why I call those 2 guys

-“Assume that 50% of the time the compressor is new than 10 years…”- you are talking about spreading the risk across multiple projects over time. What you fail to notice is there will be NO future projects if you go bust on a deal that will kill you because you underestimated the rehab costs. Yes you can rent down the road , refi, pull the money and gamble again …but why ? all the info is out there.

-“You mentioned mold tests. Do you do mold tests on all your properties? Why? “ because in around here basements tend to flood. And homeowners/banks are pretty good in covering things up. So you might want to consider including that in your budget estimate

- “Worst case, you put a contingency in your contract and you worry about finding the surprises AFTER you get the property under contract.” – and soon no listing agent will want to work with you as you take the properties off the market only to put them back on 1 week later ? ;-).

I do believe that there are certain areas where you really need to spend time on due diligence due to complications of local regulations/codes/conditions etc the routine is what kills..flipping outside of Austin, TX with municipalities that don’t even have codes ..yes ..4/5 minutes will be enough. ..flipping in heavily regulated/corrupted areas such as Chicagoland …I would say definitely more than 5 minutes to get you closer to 80% confidence level of your budget

RE: "5-10 minute repair estimate"

With all due respect but it is a recipe for disaster, especially for those who just began.

5-10 minutes will answer the question how much in cosmetic repairs you might need. Flooring, paint, windows, kitchen, bathroom,..you done ..35K being a magic number.

A thorough full day inspection will (hopefully) tell you if you should include in your budget expensive repair that pertain to plumbing, electricity, structure, foundation….and eventually lead you to the decision is the deal a real deal or not.

How do you know if you need a new service or not (even though all faucets are closed that water meter at the street is running like crazy ..I wonder why ;-))? you need to check with the city if that porch had a permit pulled

You have no idea about the plumbing situation or electricity (you spot rat droppings ..you wires might be gone)…are the pipes sloping correctly, do they drain, non-visible leaks does not mean that you are ok, maybe it is a good idea to either perform a compression test (if part of the plumbing is missing and you really want to save those old galvanized pipes) or snake a camera into the drain to look for the roots on the way. Have you checked the attic and the unpermitted 2X12 OSB sandwich support for load bearing wall that was removed by previous, previous owner. If the utilities are off how do you know if furnace/compressor are ok ? you pull that nasty panelling in the basement and you see ½ cracks on the walls., have you checked with fema if the property is in the flooding zone, additional 1K in insurance cost for home owners ain't fun. how about previous claims with the insurance ..they stay with the house, maybe the house is a historic landmark …that would perform fun tricks on your budget, how about the city records ..does the room count aligns with the what they have in the city ? …that’s just to start with ..down the road comes mold test …lead based paint test if you plan to pull down walls and much more fun, asbestos in popcorn or tile mastic and much more fun

The more facts you gather about the property the more educated you will come across as a wholesaler to an investor.

listing did not sell because of one reason only ..it was too expensive for the area/décor/interior/comps etc ...the listing agent already worked on the seller to lower the price and it did not happen ...there was no sale ...and listing expired ...do you have much success with finding some equity for yourself and selling to end user (landlord/investor)? hard to believe ..expired is a great material to list again (by another agent who is selling an owner a different dream )...but to wholesale ?