All Forum Posts by: Lumi Ispas

@Natisha Phouphayly, Welcome! Have you considered buying as owner-occupant 3-4 flats with FHA loans? This way you can use leverage to buy larger properties and grow your investment portfolio faster! Good for you to start this young! You'll be a millionaire way before you hit 30!

@Natisha Phouphaylyundefined

@Account Closed, I have sold a condo for an owner that lived in a 12 unit with a fire door that separated the building in 6 units. The client lost 3 times the deposit to the tenant and $69,000 in attorney fees because he thought the law does not apply to him. Imagine how the law got interpreted in this case. My client was ordered by the court to list the property immediately to pay the attorney fees! 

Chicago is 70% occupied by the tenants. The judges and aldermen are tenant-friendly not landlord-friendly. If the law passes the way it is, the attorneys will have fun with it. "Major improvements" of just paint and buying new appliances due to raising rent by 30-40% as the previous tenant was long term in the property and paid under-market rent, can be counted as "major improvements", and tenants can demand that $2500 up to 3 months after the tenants moving out. 

As @Sarah Lewis mentioned, a lot of these laws start with the good intention of protecting the tenants, however, due to the fact that economics is not a linear model, most tenants get hurt by these new laws. Think of how many investors will not buy in Chicago or chose not to remodel, which in turn will not help neighborhood grow, not help prices going up, not increase property tax - which will hurt the 70% tenant occupied city further as they will miss out on benefits the city will get from property tax payments, plus the staying buyers will find a way to either increase rents even further or add some fees to the new leases. 

While I agree that a 60-day notice would help tenants, 90 is pushing it, especially as we are in an area that has seasons and our rental market is seasonal.

I've personally voted and sent it to all my clients and realtors I know. Hope you all do the same so we share with the City leadership our personal beliefs and the fact that every decision has a lot of unintended consequences that hurt exactly who is intended to be protected.

@William Jenkins, I agree with you that the inflation won't start immediately. Also, I am focusing more on residential and multi-units than commercial as that's what most people can afford to buy. With so many small businesses getting out of business and offices that won't need the space they've occupied pre Virus, I expect office buildings, storefronts, and a lot of commercial to suffer and drop in price. In Residential, the inventory is low today because investors have nothing to buy. Whoever bought at the bottom has such a spectacular return they are not willing to trade it on uncertainty. They are not selling what they have because there are no better options. The homeowners have learned a hard lesson in 2007 and they've bought with long-term perspective too. Long gone is the "move every 5 years American". 

Personally, I believe the interest rate is going to stay low for at least another year and a half or until the virus is gone and the economy had recovered, and after that, high-interest rates would be 4.5% or 5%. If interest rates go up even higher, as a smart investor I would buy contingent upon keeping the existing financing. Plus with inflation, the rents will go up, which will support the prices. Remember that usually, the landlords pass the buck on the tenants every time their expenses go up. Another thing I focus on is buying 3-4 unit buildings with residential, fixed 30-years loans, so I don't have to worry about interest rates going up and to assure a high cash flow. This way, I am not concerned about leverage, as I am buying long-term, at a low-interest rate, and waiting for the tenants to pay off my properties, not selling anytime soon. 

I personally believe in holding long-term properties with fixed interest mortgages as the simplest strategy that can easily be implemented with the minimum amount of risk.

@William Jenkins, you are correct that the prices could go down... temporarily. History tells us that even when they do go down, they eventually go back up and go higher and higher than the previous cycle. When you buy real estate right, with plenty of cash flow and fixed interest rates, you are safe, because never in history the rental prices went down, and if you have a lot of cash flow even if you were to choose to lower rents, you'll still earn money, pay off the loan and get depreciation and tax deductions.

In times like this, the best strategy is the long-term strategy! Buy, let someone else pay you - and wait! No matter what, long-term you'll win!

@David Song, I grew up in Romania, a country that printed money after our Revolution in 1989, a country that had no jobs, and I'll always remember one instance. At the Revolution, my parents had enough money saved to buy a brand new car. They kept it in the bank not knowing what to do with them. At the same time, the government allowed everyone to buy from them the condo units we were living in. Some people chose to do it, some didn't. Luckily, my parents went to the bank, took a 100% loan which was allowed at that time, and started paying a mortgage.

Five years later, with the money saved in the bank for the car that we didn't use, all we could buy was a bicycle, while our mortgage payment and mortgage loan was a joke, as we used the same amount of mortgage payment from 5 years past to go to the grocery store and buy a loaf of bread, and my parents paid off the mortgage in full with one month salary, that's how much the money got devalorized. 

My parents lost their life savings from the bank to inflation, however, they gained a home as they were smart to take a mortgage. I look around at who created huge fortunes in those years, and it was the people that took loans to buy as much real estate as they could, and they took business loans to open up businesses and buy commercial properties. Generational wealth was treated by those people that took loans.

When I came to the USA 20 years ago I started researching and learning about Real Estate, and with the exception of my portfolio from 2007, everything else I buy with plenty of cash flow. Historically, Real Estate prices have doubled in value every 10 years, and with the inflation coming in 3-5 years, that price increase I thought I won't see it in a long time again - I can see it easily doubling again. When I visited Hong Kong a few years ago, a place of some of the highest real estate values in the World, I could see the size of their apartments and how the price keeps going up, and I can share that is happening in Chicago. We are having smaller and smaller apartments getting built and the price is higher per sqft than anything I've seen before. 

Inflation is coming in 3-5 years. My personal advice is to take all the mortgages you can take at the existing low interests, make sure you have plenty of cash flow, and go ahead and live your life. You'll wake up one day very wealthy. 

And you know what is the worse thing that can happen to you? If we all make a mistake, and prices don't go up that much, or not at all, the tenants have paid off your mortgages, you've enjoyed the cash flow and the depreciation and lived a really good life.

Did you know that only 5% of the USA population retires as Millionaires? Would you like to become one of them while buying properties with low down-payments that other people pay for while you live rent-free?

Would you learn how to become financially free within 3-5 years while building your wealth?

What about saving on your income tax?

If you want to learn any of the above, this seminar is for you! 

@Michelle Twilley, my team has two 203K loans under contract now and writing another offer this weekend using that loan. As @Paul Welden and @Bob Floss II mentioned, most lenders continue doing them. Send me a PM and I will be happy to send you some referrals. Where are you looking to move?

Did you know that only 5% of Americans ever become Financially Free or they get in networth $1,000,000? Would you like to learn how to become one of them? How bad do you want it? This webinar teaches you exactly that:

- Learn how you can live rent-free, and never ever pay for your housing again!
- Learn the strategies you need to learn to become a millionaire
- Learn how you can retire early.
- Learn why & how Real Estate can be a safe investment when bought right
- Learn how to keep as much as $10,000/year from what you make by paying less income tax when you buy Real Estate.
- Learn to think like an entrepreneur
- Network with like-minded individuals.

You can sign up at www.luminitaispas.com, email [email protected] or call 773-392-2906.

Luminita Ispas/Century 21 SGR

@Victor N., the way the short sales work, only one offer can be sent to the bank at all times. If a new offer is sent the process starts all over again. It seems to be that the seller had sent to the bank the 2nd offer and not yours, so you have two issues. First of all the bank is negotiating an offer that's 10K over yours, so even if you win in court and your contract is sent to the bank, now the bank is aware that someone else is willing to pay 10K more than you and will simply deny your offer. The only way you'll win is if the 2nd buyer will withdraw their offer voluntarily and the seller's attorney will explain that the buyer was not a serious buyer. 

Talk to your attorney, however, it looks to me that your only options are limited. You can go after the seller for breach of contract, still, if he's going through a short-sale, how much money does he have? What will you actually gain? And if the property is going through foreclosure and the date is so close, what's the chance of you winning before the property was either sold to the 2nd buyer or was foreclosed on?

I will say cut your loses and look for another project and next time you get a signed contract, make sure you have your own agent, don't do dual agency, as the listing agent has allegiance to the seller, not to you, and after delivering earnest money, make sure that property is removed from the market as active and that the contract is sent to the bank immediately.  

When you invest you need a really good team: a broker that understands the process and always hire an attorney for your transaction, that $500 per transaction will be some of your best spent money along with the inspector you hire!

Did you know that only 5% of Americans ever become Financially Free or they get in networth $1,000,000? Would you like to learn how to become one of them? This webinar teaches you exactly that:
- Learn how you can live rent-free, and never ever pay for your housing again!
- Learn the strategies you need to learn to become a millionaire
- Learn how you can retire early.
- Learn why & how Real Estate can be a safe investment when bought right
- Learn how to keep as much as $10,000/year from what you make by paying less income tax when you buy Real Estate.
- Learn to think like an entrepreneur
- Network with like-minded individuals.

 You can sign up at www.luminitaispas.com,email [email protected] or call 773-392-2906.

Luminita Ispas/Century 21 SGR