All Forum Posts by: Roschelle McCoy

Hi Nicholas. I’m from the Washington area, which is close to Peoria. There are a few FB groups focused around that area if thats of interest to you. @Brad Stegall and I have also been talking about creating a meet up in this area. 

@Kyle J.  Thanks for the info and links to your past articles.  I've decided to go ahead and file although I've heard that in Illinois landlords don't get any support garnishing wages.  Fingers crossed I get some type of recouped payment.  

A prior tenant moved out quite abruptly in the middle of a lease period owing about $2K in back rent and lease break fees (specifically outlined in the lease).  I've been communicating with the tenant over the past few months to try and get them to set-up a payment plan and have had two letters sent from my lawyer outlining what is owed.  They stopped all communication with me a week after moving out (which was about 4 months ago) until I sent them an email saying I was going to place a judgement via small claims court and report them to the credit bureaus.  The tenant then replied and told me he and his wife are considering filing for bankruptcy due to financial problems.  I'm now wondering if its worth my time and expense to even file the claim if they do in fact file for bankruptcy.  I know placing judgment against them doesn't actually guarantee any payment to me, but didn't know if them filing bankruptcy made it any more or less likely that I would receive payment.  Filing the claim will only cost me about $125, which I could recoup if the judge rules in my favor and they pay what is owed.  

What is your experience with this type of non-payment situation and how did you handle it?

@Caleb Jordan good thought - but I really don't have any cash to put into this deal, which is making this difficult.  

@Larry H.  Here it is.  Numbers are tight on this one, so not sure if this is worth it based on all the criteria I've laid out.  Thoughts? 

I've found a duplex that has good (but not great) potential cash flow.  I don't have the 20% to put down that my broker needs, so trying to figure out if there's a better way to structure this to make it work for me and the seller.  Here's the situation.  

Asking price: $169,500.  

Based on some comps I've looked at the property is probably worth around $200K, though would need to verify with an agent.  

Owner occupied on one side, renting out the other side.  Owner is recently divorced and has "motivated seller" in the listing.  While she's anxious to get rid of the property, she prefers to stay and rent the side she currently lives in until the end of the school year next Spring.  She purchased property 5 years ago for $155,000, so she probably owes about $140,000 (making some assumptions on loan term and interest rate).  They did put some work into it, so perhaps haven't paid down quite that much on the loan.  

It's in good condition and is rentable after some fresh paint and maybe carpeting.  The most concerning aspect of the property is the wooden frame windows that are original to the property (circa 1979) and have visible rotting.  

I'm trying to think of a way to offer on this that is beneficial to us both by allowing her to stay for the time she needs but gives me the flexibility on price or terms to be able to make this work.  I've asked her the simple question of whether she's interested in seller financing and her answer was no, but we didn't get into any further specifics on the topic.  

How would you structure this deal?  

Thanks all for the replies.  This has been very helpful.  Here's how my numbers are looking now.  What a big change!  Now the property value number looks too good to be true....  

These are all my "current state" numbers. My next step will be to rework my ARV numbers and see if I can increase cash flow to make this a viable investment.

Here's my evaluation of the current income vs. expenses:

Total Annual Income:      $83,820

Total Monthly Expenses:  $79,992

NOI: $3,828

Income is low due to below market rents.  Expenses are high due to some utilities being covered by owner and I also included mortgage expenses as if I was financing 100% of the deal.  

I assumed a Cap Rate of 5% based on other similar properties in the area. If Value = NOI / Cap Rate then this properties value is only $76,560. This can't be true, but not sure where I've gone wrong here.

I'm looking at a 12 unit apartment complex in Central Illinois that is for sale. It's a nice place that has been well maintained, owned and managed by a husband/wife for over 20 years. Units are in good condition, but could use some updating which could in turn command higher rent rates. I believe the seller is asking a bit much for the property and at this point is not highly motivated, but is willing to negotiate. Where I'm really struggling is trying to determine the value of this property to know what is a fair price (I know every deal is a good deal at the right price :). I've divided NOI/Cap Rate but the numbers aren't looking right. I'm wondering if someone could take a few minutes to look over my numbers and see where I may be off a bit. Any takers?

@Joe Splitrock I had intended to put all three on the lease. Sounds like I need to find some new applicants. Thanks for the reply!