All Forum Posts by: John Clark

Wage garnishments usually require a judgment against the debtor first. Depending on whether your repayment plan includes an acknowledgement that he owes you $X, you may have to start all over again in court. If he acknowledges the amount of the debt in the plan, then your court case is much simpler. 

That said, is the debt owed to you personally, or to a company you own? In some states, companies always need lawyers in court. Dunno about Texas. If the debt is owed to you personally, you can always represent yourself (you may have a fool for a client, but that's a different issue) and your court case could be cheaper.

Once you get the judgment, you can do a citation to discover assets to his bank, a wage garnishment to his employer, or whatever else Texas law allows.

Too bad you didn't have the seller deliver the house empty. Empty can be rehabbed faster, as the contractors can make more noise, buy in bulk, use one side as a staging area for the other, tackle problems from both sides, etc.


So, unfortunately, yes, tell the tenants that you are giving them notice as you are doing a gut rehab and then follow through. Your back up contingency, if they fight eviction, is rehab the one side while getting them out. You then rehab the other side.

And the next house you buy? Buy empty.

My gut reaction is to sell. Chicago is no place for an accidental landlord doing single family home rental long distance, particularly where you didn't pick the neighborhood. Here are some considerations:

1. Chicago property taxes are going to soar as the City's economically illiterate government has pension realities forced upon them.

2. Chicago's government is corrupt.

3. Chicago's aldermen (city legislators) are both corrupt (see above) and have no backbone. Thus they pander to the unions (see pension realities above) and to residents who are just as, if not more, economically illiterate, than the aldermen are. Consequently, you have a strong possibility of rent control. Rent control plus high property taxes will crush you.

4. Cook County (Chicago is in Cook County) has already reduced your ability to screen tenants with a law saying you cannot discriminate against people with criminal records (some exceptions to that, yes).

So selling is the way to go in my book. Now the question becomes whether to sell as is or rehab and then sell. What do the appraisers say the value of the property would be as is and if rehabbed? What do general contractors say would be the cost to rehab? Is the increased value sufficient for the rehab expenses plus your carrying costs (taxes, insurance, etc.)?

When Chicago reduces its bloated, corrupt, government (starting with reducing the number of aldermen to 15, the same per capita as in New York City) and gets reasonably competent people up and down the ranks, sure, invest in Chicago and keep houses you inherit. Shrimp will learn to whistle first.

" I am having trouble finding a  lender that will do a 30 year fixed when purchasing the property with an
LLC."

"We are . . . having to finance using our llc in order to protect my pension limits on earnings."

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So go with the LLC and add a personal guaranty to the note as well. That way the llc protects pension limits (weird pension you got there, if you ask me) and the bank has the personal commitment it is looking for.

Originally posted by @Josh Brook:  And if a person was convicted of a felony 7+ years ago and has been a perfect citizen since then, isn't that someone you'd want to have as a tenant? They clearly have turned their life around.

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Uh, if they haven't committed a felony for 7 years, maybe it was because they were doing time in the big house and were unable to re-offend? But now they're out. . . 

I can only assume you're being satiric, Josh. These ordinances HAVE to allow you to measure from date of release in order to make any sense.

"Reagan said Trust but verify..."
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Reagan was actually quoting a Russian folk saying. At the time he was trying to do a nuclear arms deal with the Soviets.

"Just as Brie said in Chicago the landlord HAS to let you out of lease if you find a like kind qualified sublet. "
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Let's clean  up some terminology here. If you sublet, YOU are still on the lease, the landlord agrees to allow occupancy by the sublessee, and YOU are responsible for rent, damages, etc., but the landlord will look first to the sublessee. If you tender a qualified tenant as a SUCCESSOR lessee, then your lease is terminated and the new lessee is legally responsible for the apartment. You may have to pay various transition fees (screening the successor tenant, etc.), but the landlord must accept a qualified successor tenant. If he doesn't, you could vacate the apartment and not be liable to the landlord, your defenses being his failure to abide by the statute in not accepting the qualified successor lessee, and his failure to mitigate damages.

God help you, however, if your proffered successor lessee is not qualified AND you vacate the premises, as then the landlord can come after you for all damages and losses until the landlord finds a new, qualified, tenant.

"I’m not considering south side suburbs or South Chicago as my investing areas."
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Why not?

"getting outbid by a lot, all multi units properties getting almost full price offers & close deals (where full price numbers doesn’t make sense!!!)"

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Numbers don't make sense to whom? You? You are irrelevant. I am irrelevant. The market rules. If you are being consistently outbid "by a lot" then your modelling is wrong. Maybe you're being spared the pain of a correction in the future when prices decline to a point that justifie(s)(d) your model, but right here, right now, your modelling is wrong. That said, remember that North Shore and Northwest suburbs, particularly A and B suburbs, have a bigger appreciation factor than lower class areas. That means a model based on positive cash flow gets out bid by someone willing to bank on appreciation.
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"I’ve switch my hunting in to apartments with HoA but seems to be same"

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My advice is to stay away from homeowner associations. They can change rules and forbid rentals, hold you accountable for tenant misconduct, and association fees hurt cash flow. Then there's always the fight between real owners who want adequate reserves and improvement funding, and investors who don't care and fight everything.

"So would it just be smarter to have a long term rental rather than short?"

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Why do people ask questions that are impossible to answer given the information they have provided? Do your homework (as noted above). Analyze your numbers in accordance with your homework information (for example, you haven't told us where you intend to buy, so nobody can give you any information as to vacancy rates), and then compare those results with the analysis of a long term rental.

Not so difficult now is it?