All Forum Posts by: Frank S.

"Also wanted to mentioned that the husband has multiple felonies for forgery and other petty crime from over 20 years ago so serious question of character and integrity."

You may be getting ready for  fun ride. I would get a lawyer involved immediately.   

Do you have an umbrella policy? If not, go get one ASAP.

+1 Happy Clause. Matthew is right, ask them what do they want. It may be cheaper to pay them to leave than to deal with an eviction or lawsuit. 

Be careful acknowledging mold. 

Water on dryer vent. Yes, it is possible to have tons of water if the exterior outlet is clogged. Water will condensate inside the vent and leak.  Check for bird nest or lint clogging the pipe or outlet.  Get a lint cleaner kit.

Future:  Get rid of the dishwasher and washer/dryer, the washer and dryer can be tenant provided fixtures when professionally installed. Or... put on the lease these will not be repaired as they are being phased out.  Have them get renters insurance.   Get rid of these guys when you can. Even consider cash for keys.

Good luck!

1.  Save three to six months in cold cash reserve for emergencies. There are high apy checking accounts out there, I have one at 4.0+% apy.

2.  Remove bad debt, if any.   Make a list of all accounts and associated interest rates. Then snowball, refinance, eliminate the highest, etc. There are many options.  

3. Max your retirement accounts ( low cost index funds by Vanguard or similar) / buy more properties

We use REI Guard, never filed claims so I don't know how they pay. You get personalized attention.

Now,  you should consider requesting obligatory Tenant's Insurance as part your lease. You shift the burden to them for many issues. 

10 days is our limit.  Get them some beer so they have a good time. 

RE: 2 million umbrella coverage

Be careful here, they may deny the 2M from the start, YMMV.  You may want to discuss with your underwriter to start at 1M first, and after a year, increase to 1.5M or 2M. If they deny the 2M, you will be flagged by other companies. 

#1, and #2. Umbrella policies are too cheap to skip.  Get a good reputable company with good ratings and you will be ok, don't sweat it too much. They are cheap because they litigate to avoid paying.  Check Bogleheads.

Alright, it took a while to figure this out - at least partially.  I have a lot more to research on this and I greatly appreciate the comments and feedback. 

As expected there are a tons of people making money by selling bogus liability protection packages out there.  Liability protection attorneys, investors, CPAs, and trust companies are comprised of efficient salesmen.  They have to keep the lights on,  I can't blame them, it's their business.   However,  some of them  -not all-  push products many investors don't need and fail to explain the real risks they will be facing.  Some investors walk away with a false sense of security and a lot of unnecessary overhead work and costs.  The good old RDPD gullibility syndrome. 

First and foremost, good insurance and good management is key to minimize risk.   LLCs and land trusts can be good tools, but they may not achieve what most people think they do.  Even with LLCs a court might "pierce the corporate veil", there are many scary examples out there.  It's upsetting to read the false promises of privacy, liability protection, etc.  given my many gurus.   

We would like to avoid probate, so a land trust can be a good mechanism. Sure, I can create a a land trust and pass the interest to a LLC as beneficiary to protect my credit score and to reduce - not to eliminate - some risk. Regarding privacy, the land trust can hep a little if properly structured with nominee trustees. The land trust by itself gives zero protection, it's a revocable trust.

Then, another question is the cost, is it worth it? With more research, I bet this will be a fill-in-the- blank process. Then, rinse wash and repeat.

To answer my concern above, if I wanted to put the property under my wife's "name", I could created a land trust and afterwards pass the beneficiary to her or to a LLC that that she controls. This doesn't get recorded and the bank won't enforce the due-on-sale-clause. We don't need this, as I can direct who will take care of the property as part of the land trust. In our case, I will pull another mortgage and set up the land trust. Then, repeat the process when she purchases one.

As I said, there is much more to learn on this. This is what makes this business fun.  Also, one can find great knowledgeable people willing to help without putting their personal interests first.  

Now, back to the books.

Thanks!

Frank

There is a great blog called The Craftsman. He discusses window repairs. Many windows can be saved, I repaired a few and they work great. Read about wood epoxies, copper seal, reglazing, etc.

Good luck, 

Frank

It all depends what you are looking for. You can find almost everything in Chicago. 

Honestly, check the sources of the economic variables you indicated.

How many cranes can you see downtown? What's the average cost of a high end flip in Albany Park, Humboldt Park, or Logan Square? How much has it been invested in Healthcare? Are there future/ongoing plans for infrastructure? What are the areas with high concentration of blue collar workers to fulfill the above-referenced projects? 

More importantly, where is the largest source of potable water in the world? 

Best, 

Frank

This is greatly appreciated.  I will do some research on my end and will follow up.

Frank

Yes, putting the mortgage on my name doesn't accomplish our initial goal, I got distracted.  Regardless, will that trigger the due on sale clause? I don't have a lender for this property.  

Our goal was to put this one under my wife's name.  We didn't do it from the beginning, because we felt negotiations were easier  under my name with this particular seller, and we needed the seller to sign the contract ASAP before a higher offer was submitted. It was fast, but worked out very well for us. 

My wife could wait for the next one, I guess. Otherwise, if I transfer the deed, we will have to wait six months - plus another month or so for the loan (?). So, this will put us near December. The market is heating up fast here and we may want to pull some cash out of this one in case something good appears again. 

I'll give you a call to discuss. 

Thanks, 

Frank