All Forum Posts by: George Skidis

Always get the advice of an attorney. No here is my non legal opinion. The reason the landlord had you cosign is because they knew she would have no assets to go after. So my opinion is you're going to pay one way or another. The question you need to answer is, "Do you want to pay their legal fees as well?"

Carl Fischer of CamaPlan.com would be the guy to talk to.

First, I am not an attorney and don't play one on television.

A verbal agreement isn't worth the paper its not written on. They can claim it, but you cannot enforce it. It is not a month-to-month agreement. It is a situation where no lease exists, and you must comply with state and local law as specific to your location

In my case I would give them a 30-day notice of rent increase and to sign a new lease. In Illinois the 30 days run from the first of the month to the end of the month. So, if you give them notice on May 20th they have until June 30th to act.

Good Luck and Good Investing

1. First and always, what does the lease say? Who signed it, him or her? If you are a good landlord, you had both of them sign it. 2. Even though he moved out, if he signed the lease, he is still responsible for the rent until the lease expires. 3. Did he give you proper notice that he was vacating the property? Once you have all of that sorted it is time to let both of them reapply to remain in the unit.

Residency is a privilege. Can she get a roommate or a cosigner? If not, she needs to be told according to the laws of your municipality. Whether you need a pay rent or quit, Notice to Cure a breach or a 30 day notice to terminate is between you and your attorney.  Serve it ASAP if she needs to go. 

The problem many landlords have is they become friends with their residents. This was a mistake I made early on in my investing. Always remember that this is a business relationship. It should always be Mr., Mrs., Miss or whatever their title is. Whatever happens always be professional. Do not become friends with the residents. If you do their problems will become your problems a little faster than you would like. As an example, I had a resident call me for bail money at two in the morning. Told her I didn't have it and her baby daddy would need to find another way out. 

You cannot carry the weight of your residents' issues on your shoulders. You are not Atlas and the emotional strain it will bring could ruin your life. Your responsibility ends with providing a clean and safe place to live. Anything beyond that is charity work and should be handled by your institution of choice.

Good Luck and Good Investing

Lee Phillips is a Guru lawyer speaker. He sells a course on LLC's and if I remember correctly, it includes a husband and wife LLC.

The National Flood Insurance Program defines a flood as two or more acres or two or more acres. Chicago does flood and the sewers also back up. Worked a food there in the late 1980s. It is a bigger problem than people think.

HELOC stands for HOME Equity Line of Credit. The KEYWORD IS HOME! So, you are asking for the wrong thing. Rental properties are not your home. What you want is a Business Line of Credit Secured by Real Estate. Mine was with US Bank. Before that with Regions Bank. Once you locate a lender you will need a current appraisal of the property, proof of insurance, Rent Roll for all properties everywhere, Last two years income tax returns for you and if held in a business the business as well. If the property is held in a Land Trust they may ask you to take it out.

Most insurance companies are taking a beating. Losses due to wind, hail and other forms of disaster are becoming more and more frequent. With the increased cost of materials and labor their losses are exceeding policy income. Traditionally insurance companies collected premiums and invested in the stock market or other vehicles to increase their income. The market is either good or bad depending on how you look at it. But the insurance companies are not faring well. For insurance to work the risk must be spread over similar units across the board. Many insurance companies are in financial distress. 

Several years ago, several insurance companies quit writing new policies on apartment complexes of 5 or more units. 

Many insurance companies offset their risk by purchasing reinsurance from other insurance companies. Some reinsurers are also in trouble and reevaluating their underwriting guidelines.

Things you need to look at are the distance between the buildings. If they are too close together they run the risk of a fire jumping from one building to another. Also check the fire departments ISO rating. There are some great volunteer fire departments in central Illinois but the distance to fire hydrants can also be a factor. If the fire department needs to siphon water from a pond or lack it impacts the ISO rating of the department.

Try and find out what the issue is and share the info here.

You are silent as to where you bought the property. Eviction and Lease laws are STATE SPECIFIC. Even worse some local municipalities are involved in the process to the point those cities are not investing in. So even if you were in Illinois anything we do in the Southern two thirds of the state just might not work in Chicago and the Collar Counties. So any advice you get here should be used in the areas where the poster is from with the understanding that they might not work in your area.

That being said here is what I think: Your current residents drove their family member to sell the building because they were happy to take advantage of him or her. 

1. Pick your fights on a first come first served basis. Send a letter to each resident asking if they have a signed lease in their possession, and could they provide a copy to your office. Otherwise, you must assume they are renting on a month-to-month basis and subject to those terms and conditions as defined by state and local law. Don't explain the terms and conditions. They will be getting enough free legal advice as it is.

2. Contact the local landlord's association and get the names of three good eviction attorneys.

3. After choosing and speaking to an attorney use the correct way to raise rents and do it immediately. Make it a "modest increase" so as not to chase them all out at the same time.

4. Evict one at a time. If the other three are paying let them stay at the new rent rate. A 25% vacancy rate is easier on vandalism, other nonsense and your checkbook than 100% vacancy. You can always raise the rent again with proper notice.

5. Don't run out and sign new leases, just get new applications. Keep all those who remain on a month-to-month basis. With proper notice this makes eviction without cause an option.

You may need to evict every single one of them. The reason for this is because their prior landlord basically ruined them as they destroyed him. If they hadn't destroyed him he would still own the building.  Rehabilitating your residents is hard. 

It only takes one bad resident to chase out all of your good residents. Get a mentor at the local association and don't be afraid to buy them breakfast, lunch or dinner on their schedule. You should also get established with a quality screening company.

Good Luck and Good Investing

My understanding of a 1031 Exchange is that you find a third-party administrator. It cannot be you or your wife. You agree to sell the property surrendering all ownership and control FOREVER. You then have a set time limit to locate a suitable replacement property that complies with IRS LKQ guidelines. For instance, you can't sell a house and buy a race car. Once the new property is located the third-party administrator will issue the funds for the purchase. Once that is accomplished you have a few other issues. 

1. If there is a loan involved, you must have the mortgage companies' permission to transfer ownership. Tried to do this once and the bank charged me $250 to ask their lawyer about it and refused my request. Talk to your lender.

2. The Garn St Germain Act allows transferring an owner occupied residence into a trust for Estate Planning purposes. An LLC is not a trust, so it looks like it would not apply here. Talk to an attorney.

3. There are tax implications to consider. Talk to your CPA and the IRS. Get clarification in writing.

4. Get a qualified 1031 exchange intermediary. The National Real Estate Investors Association has an agreement with David Gorenberg, JD CES at www.accruit.com [email protected]