All Forum Posts by: Nancy P.

So this is just a what if situation that my family asked me about at a reunion last weekend that got me thinking.  We have two kids,  and two years ago my husband and older son went together on a mortgage (that son could not have afforded himself) and the title is in both their names, as is the mortgage.  Husband is NOT a cosigner, but joint on the mortgage.  Son lives there with a roommate. We have access to the mortgage company site so we know he pays on time and doesn't harm our credit rating.  There is complete trust there, that's not the question.  We are about to do the same for the other son.  In both cases we put down just 5% as a gift to them, $9000 in both cases, so under the gift tax limit.  

I have two siblings who also had sons in 1992 and one of them said "so, if you won the lottery and paid off the mortgage, they wouldn't even have to pay the gift tax, would they?"  I had never considered this, and it's not going to happen, as we don't play the lottery.  But the concept of paying down their mortgages without them incurring the gift tax was an interesting one.  Since we aren't going to actually DO it, I don't want to pay my CPA or my attorney to answer this question, but I was wondering...did my brother stumble across a tax loophole?  I can't seem to find the answer on the Internet.

TIA

I'm chuckling because I once showed a tiny condo to a man who claimed to be a truck driver, who would only sleep in it a couple of nights per week, it would be cheaper than a hotel, for some reason he thought that meant he didn't need a background check.  He left rather than agree to it.  He had an unusual name and sure enough, turned up in the paper the next year as he was arrested for some organized crime related issue.   I can only imagine what would have happened had I agreed.  

Hi everyone:

I appreciate all the advice, especially the Illinois investors who know how eviction and notices work here.  I got busy and forgot to come back here.  A couple of days after I posted this, the tenant received his second stimulus check and caught up on his rent, and paid April a day early. He paid May today.  He has also fixed his car. (At least the oil leak, he clearly ran over something and has damage but that's his issue.)  For those who asked, I allowed the former tenant to legally leave because she was going to abandon the place otherwise.  We all three understand that HE stayed because it's hard for a felon to find a place.  We also made clear to him that he needed to catch up IN MARCH for March, and be on time after that, or he would be evicted.  And he has, so far.   BTW, I think Mary's idea of overkill on the cash for keys payment is not a bad one...at all.  If you aren't going to get paid, and your state isn't doing evictions, throwing a few grand at it might well be the most sensible option.  @Joe Archbold I didn't know that about using the sheriff.   Very useful information.  We are seriously considering selling these two tiny condos.  They rent in a day, but either it's people who really can't afford to be out on their own, or they leave in a year because it's too small/they found a partner.  I'm over it.  We have two 775 s.f. one bedroom condos nearby, and they do far better even though the rent is $1350 for them.   550 s.f. is just too small for many, especially with no dishwasher.  Thanks again.

 Yes, that is likely our strongest argument,  that between a felony and an eviction he's really screwing himself.  Sadly, it's easy to evade notice here.  Just sticking it on the door isn't enough, he has to sign for it or be served by a process server whom we have to pay.  My son would sit on the stairwell all day waiting to serve him,  but if he won't sign....worthless.  He likely won't sign for certified mail, either, those are the only options.  Mark Faustrum you are right, not looking to do anything illegal,  just wondering if there was a creative way to encourage him to give us keys for cash.  We ARE lucky.  We have 13 properties, two of them our sons live in with roommates.  We gave one tenant one month 50% off, and one tenant 4 months 50% off (my older son's roommate, long story, basically did that for our son's sake.)  Another tenant abandoned on December 1,  it was re-rented within two weeks, and only took that long because it was filthy.  We recognize it could have been far worse.  The way things are selling  in two days above asking right now, and how annoying this particular property is,  we are considering selling it out from under him.

As of the time he first was late,  Illinois had gone almost a year of having a moratorium on evictions, and frankly there was no end in sight.  There's still a good chance they will be continued beyond April 3, the governor typically decides with less than a week to go that he will extend it Once it was on two days notice.  Our city has laws against discriminating against non-violent felons.    @Kyle J  I am not still unwilling to deal with the problem. The rent payment is due today and I will serve him notice.  The REALITY is that even if evictions begin again in April,  there's going to be an insane lag.  I'm looking for creative ways to move him on out so that I don't have to lose even more money.  

Couple moved into our very small condo (550 sf but nicely finished and nice area.)  Male had a felony which he explained and we decided to allow in.  They promptly broke up---far too small when one is working at home.  She had the better job but he had the felony so she moved out with our permission.  She moved out mid February, rent was paid for the month.  March 1 the nonsense begins.  "Can you cut the rent in half since half the people are gone?"   No. Worked out a payment plan, pay for four weeks, he signed the agreement.  Paid for two weeks.  In the meantime his car is leaking oil and the association gave him two weeks to fix it.  Now he's blocked all of our numbers.  Illinois will allow evictions again on April 3, but I'm sure it will be a mile long line to begin evictions.  I need to serve him notice but wondering what the best way to go about it is?  We already offered him an out on March 5--move out this weekend and we will give you the full deposit if no damages...he didn't accept that offer.  I REALLY don't want to go through eviction as I truly believe it will be months.  What else would you suggest?  I could get his car towed but not sure how that helps except maybe using the threat as leverage.

As to higher values---in my area, condo in HOA's that allow NO renters sell for 10-15% less per square foot. I assume because the pool of buyers is so much is smaller? And they always seem to have insane dues. In another association where we own two, they are now limiting it to 25% but we were grandfathered in. Still sucks because it holds down resale value. When we buy in an HOA, the LAST thing we do before closing is make sure that rentals are still allowed. I also doesn't think it has that much to do with how renters are acting (although maybe it is true in your case)---I just think people are biased against renters.

Can I ask where you live that evictions were allowed? 

I gave one tenant half rent for two months.  Another I allowed out of his lease a month early,  immediately filled the vacancy.  This month long term tenants said they had to leave.  I said I'd give them half off for two months if it helped.  They both took two part time jobs and we will see where we are in two months.  They are making only 80% of previous income and they are working more than 40 hours.  We will probably just lower their rent by a third for the rest of the current lease anyway (ending March 31).   We are committed to helping where we can,  we are extremely fortunate to have little negative economic consequence (although husband is retiring three years early as he was offered 13 months pay to do so).  Other 12 tenants seem to be doing OK and still employed even if working from home.