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All Forum Posts by: Frank S.

Frank S. has started 105 posts and replied 853 times.

Originally posted by @Brooks Johnson:

Yeah that’s pretty standard. 2 years taxes, YTD PnLs but usually should only be 3-6months of bank statements etc.

Hi, 

The two year of tax records and W2s was easy. I sent that a long time ago.  

My concern is with the 2 year of account staments.  I gave them two months, if they want 6 sure, but 2 years  will be tough.

Hi there,

I am refinancing a cash purchase after 6 months.  The lender is asking questions about transfers between accounts and 2 year records for others. I don’t recall having to do all this work last time I refinanced a property.  That previous propery was also a cash purchase but I waited a full year to refinance.  

This is not “delayed financing”,  as it will be over 6 months when we get their check.  Is it normal for a lender to dig so deep in my finances? Two years is going to be a tough one, I have opened and closed many accounts, and moved money right and left during that time.  I don't even think I can figure out the "paper trail" for two years myself! 

Could it be that this person is confusing the delayed financing requirements?   I will certianly ask them the question, but I wanted to check with BP first so I can get some insight on this.

Thanks, 

Frank

Post: Why do so many people who get into real estate teach real estate?

Frank S.Posted
  • Specialist
  • Chicago, IL
  • Posts 870
  • Votes 345

Because selling dreams is more lucrative. 

Post: Purpose of an LLC on multi-family

Frank S.Posted
  • Specialist
  • Chicago, IL
  • Posts 870
  • Votes 345

In my personal experience, the "proper formation" was too costly and too cumbersome for a small fish like me. Good insurance is sufficient for us as described above. I couldn't find a good argument to go through all that trouble. I'm open to suggestions. Either way, I'm sure I would mess up the LLC machine somehow.

The privacy mentioned, as related to the DBA, was not done to deter claims. Joe Doe gets a check from my DBA . I receive checks under the DBA. Advertising is done under DBA. That's simple, clean, and we paid "pizza and beer money" ($65).

"Umbrellas sometimes won't cover a claim unless the primary insurance covers the claim". 

That's how secondary issurance works. Do they ever pay if the primary doesn't cover a claim?  

OP. Read about tort and LLCs.

Umbrellas are ridiculously cheap, maybe because they litigate to death to avoid payments.  $200 gets you a million, $275 may get you 3 million. 

OP. Good luck with your research.  The above is a summary of my limited knowledge on the topic.  My places are safe,  clean,  well-maintained, and I can sleep "OK" at night. 

NOLO has great books.

Frank

Post: Purpose of an LLC on multi-family

Frank S.Posted
  • Specialist
  • Chicago, IL
  • Posts 870
  • Votes 345

+1 to Thomas S

The LLC is a waste of time if you,

... do your own repairs

... show the place

... manage it

... mingle funds

In fact, a LLC is a personal asset you own, you have a personal interest in the LLC. A judgment against you will take that asset or force you to sell it.

Get Landlord Insurance and a good Umbrella. LLCs are overrated. Attorneys love it, as you will see.  

For some privacy and business identity, use a DBA. You can open bank accounts with DBAs.

Frank

Post: Need to reduce closing costs (Chicago purchase)

Frank S.Posted
  • Specialist
  • Chicago, IL
  • Posts 870
  • Votes 345

+1 on running an application with another lender.  

 I am almost done on the refinance of a cash purchase. At the benigning,I told the lenders I was shopping around for the best rates and the absolute lowest fees.  I pulled five quotes/credit pulls.   

I shared proposals among lenders and asked them to lower their fees, match interest rates, and keep third party fees down.  After three rounds,  I received lower fees and a $1,000 closing credit. They all matched rates and credits after seeing the others loan estimates.    Some didn't want to play this game.

One of them was at $4,000+ in loan/title fees and I negotiated them down to about $1,400.

They make a lot of money on your loan,  they should work for it. 

Frank

Post: What to do with my 401K

Frank S.Posted
  • Specialist
  • Chicago, IL
  • Posts 870
  • Votes 345

If you don't need it, leave it for your family.  Use their age or ages and set one or two index target funds with Vanguard. As you know, don't worry about a hot market if the outlook is about 10 to 20 years.   Are there grandkids in the horizon?

If you don't want to give the money to your family, then withdraw as much as you can, figure out a tax efficient strategy (like buying a building or starting a business) and have fun.  Travel the world.

Go to https://www.bogleheads.org/forum/viewforum.php?f=1...

You can also start a charity or a foundation.  We need more of those. 

Best of luck, 

Frank

Post: Is my plumber screwing me over?

Frank S.Posted
  • Specialist
  • Chicago, IL
  • Posts 870
  • Votes 345
Originally posted by @Samantha Miller:

Hey BP! Looking for some input on an inspection report. 

I am under contract to purchase a 4 bed 1.5 bath row home in Philadelphia. This is my first home purchase, and I have little to no experience with real estate, construction, etc. The general inspector recommended, due to the age of the home (built 1925), that I have a plumber inspect the main sewer drain line with a camera. I was quoted at $350 for the service (discounted from $500) plus $10 for the disc of the camera recording. When the plumber arrived, he said would have to pull the basement toilet bowl in order to access the main sewer, and would have to charge an extra $200 to do this. He proceeded, but ultimately after 1-2 hours of trying he said he was unable to get the camera to bend around one area of the pipes to get to the outside trap. He was able to go left, but not right (again, I do not know really what this means, just reiterating the report). It says the camera showed "heavy scale going back toward stack", and that he "ran water - no back up at this time". He recommended "cleaning the main sewer, chiseling out cement, to remove vent plate for access into main". The company owner later clarified that bending any further would've risked breaking the $4,000 camera. I have not yet seen the camera footage, will receive the disc next week. However, with everything else he was able to inspect, no major concerns were raised that he felt would be reason to reconsider moving forward on the house.

My question is simply - does that sound right? Is it typical that I would still need to pay the full price even though he couldn't access part of the line? Would another plumber have been able to get down there? This might be totally fair and normal I just wanted to throw it out there for some feedback to make sure I am not getting screwed over due to my own lack of knowledge! I am trying to make sure I learn throughout this process.

Thank you!

Rip off?  Yes and no.

The $200 to remove and reinstall a toilet is little excessive, because he should've assumed this on the price from the beginning. It's not too bad. It takes 20 minutes to remove and 20 minutes to reinstall.

The plumber probably couldn’t remove a cleanout to insert the camera, so the toilet is the only option. He had to do it, I guess.

My attempt to translate his comments are below,

"heavy scale going back toward stack",

This probably means your cast iron vent is heavily corroded and scale has fallen into the underground sewer. Vent cast iron pipe is the first to go.  Keep this in mind, you may have cracks in the cast iron inside your building.  Repalce as much as you can during your renovations. 

"ran water - no back up at this time"

Although there is scale, the sewer flows water. This may stop larger solids, however. 

"cleaning the main sewer, chiseling out cement, to remove vent plate for access into main".

He recommends jet rodding the sewer and installing a new cleanout. 

Camera

I saw a plumbing contractor attach a string to the end of the camera. Through this technique, he was able to turn right and left, great contractor. This was for a high end commercial project, however.

You should expect work in the thousands to repair your underground and vent piping.  Get a few quotes and be ready to negotiate. Schedule for the winter, contractors have much less work during that time. Ask them if they are busy, that will let you know who can lower their price.

Good luck,

Frank

Post: Contact Your Legislator: Continue Rent Control Ban

Frank S.Posted
  • Specialist
  • Chicago, IL
  • Posts 870
  • Votes 345

@Matthew Olszak,

Your efforts are much appreciated. I will be in attendance.    

Filing a Opposition Appearance Witness Slip is very simple, it takes less than a minute.  Please, go ahead and do it. 

 http://my.ilga.gov/Hearing/HearingDetail/16324

Frank

Post: Sell or hold Chicago south side rental?

Frank S.Posted
  • Specialist
  • Chicago, IL
  • Posts 870
  • Votes 345

Hi Sarah, 

How about you contact a Realtor to give you an accurate price on the property?  Zillow may not be the best tool.   Some brokers do BPOs for free. 

Now, you mentioned that you don't care about tax shelter.  Well, if you don't mind seeing your credit tanking, how about a short sale?  Have you consider simply letting it go?

Best wishes, 

Frank