All Forum Posts by: Marcin G.

thanks - appreciate your feedback. I will keep you posted regarding the progress of my project. yes my job will be a full rehab ..I can imagine knocking down some walls to open up space looking for a more modern layout ..moving electricity, refinishing/putting new flooring, gutting kitchen, new cabinets, counter tops, full paint outside/inside ..possible new deck, yard, possible cosmetics in the basement (new carpet, finish walls etc) ...properties selling for under 50K in my area are needing all that ..I hope I will not discover too much while opening walls. most of those houses are winterized with no utilities running ..so once I switch electricity/gas/water on ..lets see if the thing will not fall apart ;-)

for a newbie ..the best property is the one that you can access as many times as possible before you close. having the property under contract and "acting" as an owner, contractors will talk to you ..you can get bids, quotes, do inspections, termite letters, radon tests, mold test, etc ...imagine bringing army of inspectors when an owner still lives there ..not possible. you control purchase price ...so make sure you factor all things you need to change, add, update into ur costs ...u need to discover as much stuff as possible. once u do 10 flips ..probably short 10 minute walk will be enough to get u rough idea ..but by that time ...inspect, inspect, inspect

is it real auction ...or auction posted on MLS as well ? check :

if you can rent there

whats the balance on unit and who will pay it off

parking included ? separate deed ? assigned space ?

can you get hold of minutes of HOA meetings, bylaws, rules and regulations

special assessments coming soon ?

do they have budget and current spend ? is it run by pro PM or 3 neighbors ?

pets ok in the buildings ?

any stipulation regarding time to resell ? 90 days etc ?

it is just to get u started

MLS is slow drying out ..REOs getting more expensive ...more people with credit or money..2009 is over ;-) so yes ..work with whoever brings you good deal !!! ;-) and yes ..every day in your and my area there are flippers who got their hands on the great deal via that channel. click the heck outta ur xls file and you will make it!

I have a question regarding subs:

What questions do you like asking subs to find out if that’s the right person to fix your plumbing or paint the outside of your house? I was thinking to work with a GC but …there might not be enough room for GC to profit .. I plan to start with a small project …50K property 3BR/2BA ..put another 40K and hopefully sell for 120K..I am talking Maywood, Bellwood, Melrose Park area of IL. If somebody is familiar with that area I would appreciate feedback

Here are the things that come to my mind :

-Are you bonded, insured ? would I be able to get certificate of insurance with my company listed as additional insured

-Do you have a business card with your company ?

-Are you ok to sign up a contract ?

-When can you start ? ->if they can start right away it might be a red flag, good contractors have work lined up…

-Where are you located ? the closer the better I think

-References ? they probably start looking at me weird at that point…

-Do we need to pull permits for the job ? If I am looking for a plumber to fix busted pipes in a house and he does not want to pull permits …then I think it is a red flag …

-Now I am doing pretty good job screening tenants …do you think I shall apply the same technique towards subs ..taking picture of their driving license, checking local court records if there are any pending suits against them or if they sued somebody ?

Basically, I do not like to scare good subs if I start talking about W9, 1099, insurance, contracts etc. Chicagoland market is really though and most of the deals are done cash with no paper trail.On the other hand though I would like to ask them some standard questions that would tell me right away if the guy is right for the job or not. appreciate any help !

why would you pay "per hour" at all ? I pay for the job done. need painting ? ..here is 5gallons of american finest flat and you tell me how much you want to paint the whole crib. if I start paying an hour rate .. all of them suddenly will become very slow. in general I provide material and ask for skill/labour. first question is : how soon can u get it done = X, second question is how much =Y. then do this in ur head Y/X and u get ur hourly rate ...which in some cases make a lot of sense in some cases I smile and tell them to beat it ..

all depends if he manages the property himself or not. if yes then LLC does not offer asset protection. if he hires out property management than its entirely different story and there is benefit in setting up LLC

what if I decide to lien the property due to the gambling problem (or some other problem of that nature) ? lets say I want to protect my assets from ...myself, and being afraid that one day I will sell my rentals one by one to replenish the bankroll I decided to lien the property and .in case I sell it ...well then the beneficiary of the lien will take all the proceeds from sale. If I lien the property now ...long before anything bad happened (not after !!!) then ...I think the strategy is plausible ...what would the judge possibly come up to disregard the liens ? is such a form of lien even possible ? thanks for your input

agreed. however there are number o things beyond your control. let me tell you about a property I purchased not so long ago. it is a 1BR condo on the 2nd floor. it has a balcony.. I was suspicious about the construction of the balcony (that spans from ground floor to the 2nd floor). I have inspected it ...and decided to ask city inspector for an opinion. he showed up, told me it meets village standards and everything is good. so I went further. I asked him if he can comment on the railings on the balcony inside the apartment. Same deal …he approved the way it’s reinforced etc. I have all that in writing so now ..lets say my tenant has a party, the balcony collapses..who is to blame ..well of course the landlord … ..what’s gonna happen next…insurance kicks in. they hire an attorney and ….if the plaintiffs attorney looks at my net worth and sees liens all over my properties : I am less of a prey to them …so a settlement is an option they most probably be advising their clients. Time is money right ?
so bottom line is: I can prove to the judge that I have done all I could do prevent that happening and hope for the best. I hope that my primary insurance will kick in and umbrella policy if necessary. But being on the mercy of insurance or understanding judge is not enough. So last resort …some sort of asset protection. By the way …none of LLC, trust nonsense would protect you in this situation. Everybody gets named in the lawsuit…and as long as you did the job yourself or supervise or actively managed your property …you are liable. So the only viable protection is HELOC …having 80% of equity of your property (that is paid off in my case) available as a line of credit and ready to be dispatched wherever its safe in case charging order gets you or some equity stripping ploy …which hmmm as you all see is not super clean/safe approach to protect your assets. I am not trying to be sneaky but comon ..we live in a country that has legal system designed to order mcdonalds to pay millions because some idiot spilled coffee on herself. I am just trying to protect myself against stupidity of the system..that's all

thanks for all your input. Additionally, there is another problem ...as the funds are paid off, the lien shrinks removing the equity stripping. In other words, if I have a lien on all the equity, that lien gets smaller as I pay off the loan until there is no lien left and the properties are unprotected....