All Forum Posts by: Robert Taylor

Downturn??? Is that the real estate downturn, or the oil downturn, gold downturn, silver, hog bellies or whatever they're trading an hour or so south of me in Chicago  . . . and of course for all of those downturns, you can find the exact opposite predictions from SOMEONE for anything and literally you could spend all of 2017 watching non stop youtube videos, listening to "financial whiz" podcasts and interviews, there's the screaming "I'm bald but refuse to do the shave your whole head trend since I'm too busy screaming about stocks all of the time" stock dork on CNBC or wherever he is (maybe MSNBC-oh wait, they've got the entire on air staff on 24/7 suicide watch since the election results came in at MSNBC) 

Anyway, point is that you can literally find someone pushing ANY prediction and what is also very troubling is that MANY who push the "downturn" scenarios and ESPECIALLY the "major downturn" or even the incredible # of "global economic collapse is any day now, might even be tomorrow!!" fear mongers and sadly, they're quite often just by coincidence also selling you the PERFECT investment to get into!! SCAM! (although getting our a$$es $20 TRILLION in debt and still doing constant promotion of a "we'll pay for that now too!" to more and more Americans for more and more stuff is financially and economically INSANE!! Yet, I'm not ready to load my camper van up with MREs and go park in the North woods or somewhere in Manitoba quite yet!!) 

I certainly keep an eye on MANY financial indicators and have my bachelor's degree in accounting (right before most or all states changed CPA exam and thus accounting degrees to a 150 credit endeavor) so I know my #s well, but no one has a crystal ball yet as far as I know!

I'll PM you name of a great guy, just waiting to hear back from him to just confirm he's not swamped right now! He's installing two Trane HVAC units for me at my house now, they're actually units #2 and #3 there to correct a so-so retrofit job from the late 90s on a 1937 home. He can also sell you a brand a bit lower in the price ladder, closer to the Goodman range which is usually closer to the lower end, although I've heard they're decent units.

Only issue (and you'd know this being an agent) is buyer's perception is often that Goodman is a low rung brand, if you were to sell it anytime fairly soon! I've heard Goodman makes decent stuff, maybe NOT = Carrier or Trane, but certainly not junk. I just heard back and will PM his info now, great guy to work with!!

Hmmm, haven't had much time for anything lately due to working a lot, so haven't spent much time at all on BP last few months and sparsely visited over the last year or so, NOT because it isn't a great resource, it certainly is, BUT seem to feel a new (old) vibe here now, maybe its just me or deja vu, but feels kind of like 2005 or 2006, maybe 2007 all over again?? Certainly hope not, but they sure are packing the cable channels with those damn TV shows again too-just like back in . . . oh never mind, I better get off this laptop and back to work!

OK, sorry for the misunderstanding, how about seeing if your agent says he/she WOULD write that offer and if they agree, kick them to the curb! Just a little humor there but one thing too is that since the subject came up about banks and writing pre-approval letters, etc one goal to have (and I'm not certain here and don't have time now to read the posts again, but it sounds like you don't have the HELOC yet, BUT you at least think you've got a fair shot at getting one-i.e. no awful credit score, no bad customer rating at the bank(s) you bank with, etc) it is GREAT if you can build a relationship with the bank and often the smaller banks (like a regional or local to your metro area sized bank or smaller size bank) are better at this vs the MEGA BANKS, but sometimes if you find the right people at the MEGA BANK they can play ball too, I'd suggest a smaller bank though, if you can build a relationship with them and really often with one or just a few key people there, that relationship over time can pay dividends far beyond just the rigid "rules for lending and biz loans" might lead many to think.

Especially in the regional and smaller banks, they'll usually have a loan committee that meets to go over any somewhat substantial biz loan and maybe in a few years or 5, 10 years-whatever time frame you've learned the ropes and pushed ahead and now have this ball rolling and are really ready to make the jump to something not just the next step up, but maybe several steps up, having someone or a few people on that loan committee or who have the ear of the committee saying "Hey this John Ford's a smart, hard working, organized guy who just always makes things work, he deserves a little extra look here for this next loan, I think he's a risk worth taking, solid guy!" that might be the difference down the road for you. No, "shmoozing" loan officers at banks can't get a big loan with a 428 FICO and Chexsystem after you, etc but it can put you over the top OR maybe get some friendly terms to re-work an existing loan if you hit a rough patch which nearly everyone does at one time or another, where the person with no relationship and personal trust built up may just get their loan yanked in the same situation. Just some long term ideas.

I upvoted both of @Russell Brazil's comments, as a WI licensed broker myself, even though I've used my license mostly for my own investing, you apparently have great faith in your agent/broker's abilities (here in WI we have two levels, agents and brokers, brokers require a bit more training BUT that's not to say there aren't many agents out there who know the biz inside and out and may know more than many brokers even do and some licensees just don't know much at all-so then its a question of whether or not they go to their managing broker for advice or just go rogue and shoot from the hip-which is NOT a smart strategy!)

I'm assuming there must be some relevant details missing and these are short posts of course, so that's understandable but sure leaves me wondering what your agent is thinking by even suggesting that would be a worthwhile offer to submit, both for what Russell pointed out, you could get sued for damages if the seller is led to believe anything more than what you said, that "hey I might/should have this HELOC $$ but it may just fall apart too" and if that's all the offer says, I can't see many sane sellers (and their agents) doing anything but trashing that offer ASAP.

The only chance maybe is if its been on the mkt for 2 years, NO ONE wants to touch it and they'd probably listen to someone who's listing their Powerball tickets as their proof of funds! "Here, see $345 MILLION RIGHT HERE!! Or $180M if I take the lump sum, but these are damn good #s I've been playing for years, this is the week!!"

You said its a hot deal though, so why in the world would they even bother looking twice at anything but solid offers? 

Off the top of my head, the best offers rundown might go like this:

#1 in line being CASH (with SOLID proof of funds, i.e. letter from bank exec saying "yes he's good for it!" being the best since they can call to verify, as it is not hard to bogus up a Photoshopped "$2 mil in my checking account" statement when its actually $2.00, or if real balance, you COULD withdraw that cash tomorrow, but when a bank exec vouches for cash buyer, that's GOLDEN!) NO contingencies and FAST close (usually takes at least a week around here to get title work done even for rush jobs, but title co's like to be sure about things!) so that's a dream offer assuming price is good, then it goes down from there.

Mortgage involved? Now closing just went from maybe 2 weeks or less to prob 6 to 8 weeks, but holding out for a cash sale w/quickie close is usually unrealistic. NICE when it happens though!

Home inspection? Oh great, we get to spin the "home inspector roulette wheel" some inspectors are GREAT, some others, well not so much and can jeopardize a sale for reasons that are dubious at best!

If you can know enough about inspecting a property yourself, removing the inspection contingency can be a big plus and why REO sales usually say "NO INSPECTION CONTINGENCIES"!

Besides that stuff on making one offer look 10x better than another that may even be offering more $$, I agree with Russell's concerns about the agent willing to write these offers that would say basically "I SHOULD be able to pay, but don't totally count on it, might easily blow up on us!" because we've got to follow some pretty tight guidelines for submitting offers and besides his very valid legal and liability concerns, also the reputation factor. Even in a big metro area there are only that many agents out there and they nearly all work for a limited # of firms, I can't see that offer making any agent look too professional, either.

Just looking at the terms often set for REO sales, assuming they aren't DESPERATE, tells a lot about what makes up a great looking offer to a smart seller and smart listing agent/broker!

You sure as hell better be doing a title search on ANYTHING you're going to possibly bid on!!! You MUST pay 10% of purchase price ON THE SPOT, balance due within I believe 10 biz days of confirmation hearing (2 to prob 6 weeks post-sale date, depending on how busy they are, now that overall # is down, prob closer to 2 or 3 weeks) but if you don't do that search and buy it, see the "regulars" shaking their heads and muttering "why the hell did he pay that much?? Bet he missed the $19k owed to __________ on that one!!" Well, IF something like that happens, THEN you get to go with hat in hand to the law firm representing the party that foreclosed, get down on your knees and say "Can I PULLLLLLLLLEEEEEZZZZEEE get my 20 grand back (say it sold for $200k)  PULLLLLLEEEEZZZZZEEEE???? Pretty please with icing on top? OK, how about I wash your car, cut your lawn and walk your 4 dogs every day for 20 years? OK, I'll bump that up to 25 years and at least you'll give me HALF of my 20 grand back, THANK YOU SOOOOOO MUCH!!!! 

Actually, in this hypothetical case, you'd be better off eating the $19k lien, tax lien, or whatever it is, 25 years of daily dog walking sucks! Yes, you either need to find someone who knows how to do title searches and maybe will do them on the side for lower $$ in exchange for the volume of them you'll bring OR learn to DIY them, but need to be darn sure you're DIY'ing your searches just right!! I've not been down there in a while, but have the funny feeling that with "flip shows" on TV 24/7 again, it might be back to the zoo it became around 2006 or so!

A LOT of various issues here, none of them anything I'd consider a "plus" either! 

First off, having lived for a little while in the Hartford area this brought back a few memories and I had to laugh thinking back to the ridiculous amount of regulation in CT, they truly have a long lasting love affair with regulating EVERYTHING there! Here in WI, we can get heavy on the regulations as well, but nothing compared to CT, so you'd think based upon the logic of the "if we regulate and make a rule, law, license, training, etc, etc for EVERY last possible thing or business transaction, well THAT is why here in CT, we don't have messes like in that picture HERE!" Ummm, that pic IS from a building in CT!!! I guess they better add a lot more mandatory training hours to their courseload! Just for kicks, check out this "simplified" guide to low voltage installer licensing requirements in CT:

http://www.casiact.org/assets/2016-simplified-guid...

Here in WI, up to 24 volts I believe it is, NO license is required and we see some of the same messes and I'd agree with the other comments, as landlords we MUST keep an extremely tight leash on ANY sort of installs like these and I've seen the "cable guy" do much of the same and it doesn't matter if its some dump about ready to fall over or an incredible, truly classic home with a stone or brick exterior, they'll normally just drill right through the exterior (good for the masonry drill bit companies!) and hope they don't hit any live romex on the way in!

Since the weather in Chicagoland is nearly identical to MKE area, maybe 1 degree warmer average annual temp if that, I'd certainly assume that any property that has electric service also has a gas line running to it, unless you're in a rural area where they'll often have a big propane tank sitting outside someplace. So, I'm assuming 30 min south of Joliet means you've got gas there and if so, I can't see why you wouldn't go with gas-even if somehow a heat pump can come anywhere close to the cost, as Rob mentioned, when trying to sell the buyers will walk in and say "Electric heat??!!! What the heck??" as will many potential tenants. (the ones who don't notice or care are probably not the ones you want to rent to!)

Even if we're all wrong on electric being far more costly, perception is reality and you'll then have to "sell" that premise to any tenant with half of a brain and if ever selling, to the many buyers who'll undoubtedly object.

The other point someone already mentioned but that is TOTALLY on point is where our electric bills will be going vs gas bills down the road. If current fed gov't plans keep rolling in the same direction, well in WI we burn lots of coal right now, they want to just kill that off sooner or later and that's not good for our future rates and one bit of useless trivia I know is that IL has more nuclear plants than any other state, not sure where that concept is headed after what happened in Japan, but I doubt it will help to lower costs for nuke plants! Even if Lake Michigan isn't likely to have any tsunami's anytime soon, I'd expect the regulatory costs of nuclear to climb rapidly as we keep hearing about radioactive everything in the Pacific. 

I believe IL's #2 source is also coal. Natural gas on the other hand seems to be turning up everywhere these days, so even without the potential for massive future electrical rate increases if gas makes much more sense, I'd stick with gas! One figure I did see was that over 80% of IL residential uses gas heat and I'll bet 98% of the electric is much closer to Cairo, IL than Chicago!

Oh man, like this should even be a question! Heck yeah you ought to take an attorney's advice into consideration when drafting a rental agreement and I'd HIGHLY recommend getting some referrals on that as well, you want one who's well versed LOCALLY in what flies and what doesn't, which here as was explained to myself and at least one other BP member attended, plus many more (and a rather "famous" BP member at that who I recognized from her profile pic, but she certainly seems to know what she's doing with rentals and was at the same event, a "landlord bootcamp" where the local attorney who I've been told is THE BEST landlord atty to call in a crisis taught the ins and outs of this stuff) but part of what he explained was how in Milwaukee Cty the judiciary of this county of nearly 1M residents which ranges from very poor areas to very wealthy areas has mostly very liberal, left leaning judges who generally ALWAYS find any reason they can to take the tenant's side and often give some awful tenants "one more chance" much to the landlord's chagrin. Neighboring county to the west, Waukesha Cty, with about 400k residents and ranging from some middle class, much upper middle and some very high end, so in general a far more affluent county has a much more conservative, right leaning judiciary that in the EXACT SAME CASE where in Milwaukee Cty you'll likely lose as a landlord in court, you'll likely get an eviction or whatever remedy you're seeking right next door in Waukesha Cty-and of course, this is all based on the same state laws! 

In addition, I know that Madison, WI the 2nd largest city in the state, state capitol and quite famous for being a VERY left leaning city politically, has enacted many of its own additional landlord/tenant laws to the point where this same attorney recommends simply to "not bother investing" there in residential rentals. I'd be nervous as heck walking into court trying to get them to enforce some contract I'd drawn up myself in ANY of these places, but especially in the "anti-landlord" areas. You could end up with an even bigger problem on your hands!

As far the part about MKE and the "most segregated city in the country" (which has been tossed around literally for at least 20 years now and which I don't deny, although I'd like to see the metrics on these studies, since anyone who's taken a college stats class knows how easy it is to manipulate the outcome based on what you want to get for an outcome) but that one REALLY bothers me, as while I don't by any means deny we still have racist beliefs here among some people, I also see people, not just white and black, but of all backgrounds also getting along just fine and have certainly heard of cities where I think the entrenched racism goes much deeper than here. 

I've seen countless FB discussions where some people (usually always young white people ironically) stirring this pot by saying things like how a black family simply cannot buy a home outside of the traditionally African American areas and especially places like Waukesha county, which is complete rubbish and I've seen first hand examples, not a whole lot but some, where it has worked out just fine. While you can find SOME very backwards, racist as hell people if you look for them in Waukesha Cty, MKE Cty, any of these areas here, you can also find a larger number of people willing to give anyone a fair shot. Also, we have a good number a black people (and I know a few personally) who've chosen to stay on the north side because that's where they're from and it is home to them and though they could easily afford to move out, they choose to stay. You'll find many "micro-turnaround" areas around the north side of MKE, often where an extended family owns, or sometimes owns some and rents some of the properties all in a concentrated area and believe me, they KNOW what is happening on those blocks and they do give a damn what happens there. 

Reading the comments from Cody, well if I wanted to get into a political discussion (which I don't, I'm so tired of the back and forth, left vs right paradigm crap, one person sources a left leaning source that backs up their views, other guy sources right leaning source that backs up their views, it continues on for pages, no one convinces ANYONE OF ANYTHING and all that's accomplished is wasted time for everyone involved. People need to look deeper than this tired left vs right, everyone falls into a perfect pigeon hole crap, which accomplishes nothing but to continue the divides between groups-AND NOW THE GROWING # OF PEOPLE WHO MAKE THEIR LIVING PROMOTING DIVIDES, whether true or totally false!) If I wanted a political circle jerk, I'd go to one of those sites and waste my night arguing that crap all night long. I don't see MKE as "cookie cutter" (usually=north side is simply a big cesspool of violence, drugs and despair, suburban counties are "picture perfect" on the surface but dig deeper and its just a modern day Klan clown rally, BOTH assumptions are trash) I see MKE as a very diverse area where, if you find the right people to do business with, background and ethnicity is not a factor here, simply whether people are decent people or not, you can succeed here.