All Forum Posts by: Nick L.

@William S. Thanks for the tag. Sorry it's taken me a while to reply.

As you know, ROI falls into two major buckets - cash flow and capital appreciation. (There are also the minor buckets of equity paydown and tax depreciation.) The 53222 zip code is not a majorly appreciating area, nor is it likely to be in the near future. So you need to either buy properties significantly under market value or at market value with great cash flow.

Without getting into the argument about capex numbers, your opportunity here is in the 1% region. That's pretty much breakeven in a Class B/C Milwaukee neighborhood, perhaps negative cashflow if you are in a sub-area of 53222 with crappy tenants. That's not worth it to me. 

I've had huge problems getting anyone to do snow. My landscaper dropped that part of his business last year and I guess a lot of others did too. If one of your tenants is trustworthy you could give them a rent break for doing the work. Aside from solving the problem, it will likely work out cheaper even after you buy tools and supplies.

@Brie Schmidt This property is in Chicago. Sorry, I didn't mention that above!

@Clint Dorris Bummer about the BBQ sauce!

Yes I have no expectation of any particular outcome or future service. It was just a sign of appreciation. I've met him a few times before so I'm sure he knows there are no strings attached. Anyway he said thank you so I assume he accepted it!

Follow up question... the building is in poor condition (which is fine with me, I'm used to major rehabs) and the listing states buyer will assume any building violations. However when I check with the city there don't seem to be any violations. What am I missing?

@Brie Schmidt @Jack Smith @Mark Hafeli

Hoping you can help with an interesting case similar to this. I'm looking a century-old 4-flat which is in an RT-4 district. One unit is advertised as storage so I assume only 3 are legal, either because of zoning or because of the Certificate of Occupancy.

I checked the assessor web site to find the specific zoning for the building but it just says 2-6 apts, over 62 years, so I'm not sure whether 4 is legal or not. I don't see any way to examine the Certificate of Occupancy online but I assume that this is only for 3 units.

Questions:

1. How can I determine whether this specific building is zoned for 4 units? Per Brie's comment it may not be even if it's in an RT-4 district.

2. If zoning is ok and I bring the 4th unit up to spec per Mark Hafeli's article at https://www.biggerpockets.com/blogs/4434/32108-wha..., would there be any other problems with converting the building to a legal 4 unit? Or am I missing some other piece of the puzzle?

Note that I plan to keep one unit for my own occasional use when in town, so the conversion isn't critical to my cash flow. It would be a nice-to-have for future sale.

Thanks @Angelo C. In the end I sent a gift card of $100 with a note saying that I appreciated him working so quickly and over the holiday weekend. Hopefully that makes it clear that I am just sending it as appreciation for his work, and not tied to the outcome.

I just had a bank-ordered appraisal done as part of a refi. I was extremely happy with the results. The appraiser has valued some of my other properties in the past, and I've always been happy.

I'd like to give him a gift to show my appreciation, but don't want to break any professional ethics code of conduct, or make it seem as if I'm paying him off. 

USPAP doesn't have any useful guidelines and anyway I'm not technically the client, the bank is. I was thinking of maybe a $100 gift card for a local restaurant - enough to be more than a token thanks, but not enough to suggest I was swaying him.

Any thoughts or experiences?

@Randall Brown Good to know my petty criminal is not the only joker out there with a half-baked concept of liens! Just as there are professional tenants with cunning legal tactics, these people are a sort of professional former owner.

A month ago I would happily have offered the tenant and former owner cash for keys. In fact I did offer the tenant a $0 lease for 2 months until she moved out, but she never responded to me. Right now we are past that point though. I will have to take my chances with the eviction and hope they are not vindictive as well as fraudulent.

Thanks @Linda Weygant and @Matthew Olszak! I appreciate your kind words and support.

You are both absolutely right. Dealing with these situations is more about emotional fortitude than anything else. Despite this one guy's attempts to screw me over, I've almost always found that people involved in foreclosures are far better to deal with than I thought they would be.

My favorite was when I bought a foreclosure to flip last year, and found that the former owner was now living next door. AWKWARD! I thought she was going to be bitter and vindictive. But she turned out to be the loveliest, friendliest person who went out of her way to help me.