All Forum Posts by: Ryan Reynebeau

 Thanks Adam - I agree. I would normally have no problem letting someone take a day extra or 2 without charging them, as long as it didn't really affect my next tenancy and if they were being respectful and honest. But some people just have an instinct that everyone is out to get them, which makes them combative I guess. 

 Thanks Theresa - I'm definitely going to send her an itemized list of deductions and charge daily rent. In the standard Chicago lease, there is no requirement for 30 days notice from a tenant, unfortunately. I was mistaken since it is such an established practice. 

 Thank you for this response @John Warren. Going forward, I think it just makes sense to wait until the tenant moves out to start showings. I have more control over what the unit looks like at that point. Learning opportunity for me!

Hello!

Question regarding deducting unpaid rent due to overstaying a month-to-month lease. 

I have a tenant who gave me a 7 day notice on a month-to-month lease last Sunday July 24, which means her lease would officially end on Sunday July 31. She originally stated via text that she will be out "before August 1st". There is more to the story, but I will add it at the end... I believe my question is quite black and white. Come July 31st, she texted me saying that she needs a couple extra days to move out. I simply responded "Ok. Just send me a text when you are officially out, leave the keys on the kitchen counter and lock the doors behind you".  Per Chicago standard lease Covenant and Agreement #16 - Holding Over, can I simply deduct two-times the rent for each day that she stays past July 31 off of her security deposit? Do I need to make an attempt to ask her to pay the rent for these days? Obviously she has made no mention of paying rent on her own and, for various reasons, I have no intention of communicating with her other than waiting for her text me that she is moved out (see bonus material for details). 

Thank you in advance for the advice!
 

Bonus Material:

So my tenant originally stated via text message on July 24 that she would be out before August 1st and specifically asked if she can expect her security deposit back.  Fine, it is a month-to-month lease agreement, but I thought it was a little weird that she added the question about security deposit. In my response, I had (wrongfully) assumed that there is a 30 day notice requirement for the tenant, so in my response, I let her know that it shouldn't be a problem, so long as I can get a tenant in relatively quickly, which also shouldn't be a problem. I had no intention of making a big deal of the deposit or the short notice. A day later she replies with a huge message lecturing me on why it's none of her problem if I can get a new tenant, about how the rent is too high and how she can't work because of her asthma and her mom's health problems lately, about how she appreciates me but that she needs to know that "this process is going to go smoothly." I responded and apologized that I gave her any indication that I wouldn't be reasonable. Over the next few days I lined up several showings of her unit, intending to show them before she was moved out. I texted her the details of each showing more than 48 hours in advance. She never responded to any text messages. First guy didn't show up, so no issues there. Then Sunday morning the 31st, I had 2 showings and the first one showed up. I texted and called the tenant to confirm we were going to be coming through, with no response to either attempt to contact. So we went up and knocked on her door, and I announced myself. She announced out that she wasn't "ready" and so I said I'd come back later and went outside with the prospective tenant. She came out a few minutes later, irate, telling me that I have no right to show up unannounced to "her house" and try to bring people inside. I calmly explained that I gave her proper notice and showed her on my phone all the text messages that she never responded to. She was stumped for a response but refused my entry anyway (breach of lease, of course). Keep in mind this is all in front of the poor prospective tenant, who sheepishly suggested that she come back another time. I proceeded to cancel my next showing too. The tenant followed up with a text stating that under no circumstances should I bring any more people into "her house" without her consent. Fine, I'll cancel the showings and wait until she moves out. Should have done that in the first place, it's not that big of a deal. Then later on that same day (this is July 31.. her last day), she texted me and told me she needed a few days to move out - "hopefully I'll be out on the 2nd at the latest". I only replied via text telling her to let me know when she is out, leave the keys on the kitchen counter and lock the doors behind her. It is now after 10pm on August 2nd and I haven't heard from her yet. I see on security camera that she still has some things in her storage spot. I know she is in process of moving since I live in the house's other unit (little piece of info I withheld ;) ). I'm sure she has no intention of paying rent for these couple days. 

She asked me to help the process go smoothly, but she herself has made sure that it does not. I have no more sympathy and was so happy to see that I can withhold $110 per day as long as I never have to see her or talk to her again. 

Hi all!

I am looking at purchasing a property in Chicago using an FHA loan. It is a 2-Flat property, so I would live in one side and rent out the other. This deal fell through once before with a different buyer because the inspection revealed about 50k worth of work that needed to be done in order to comply with FHA requirements. My realtor and mortgage lender both suggested using a 203k FHA loan. They both warned of finding a good, compliant contractor to do the work for me. Has anyone here worked in Chicago and knows a reputable contractor who can fulfill the requirements of the 203K FHA loan for me? I think I will pull the trigger on this property, but I want to be prepared. Furnaces (2), roof (flat rubber roof) and a couple windows is likely most of the cost. I have the inspection report that was done on the property last month. The property is in Chicago city limits.

Thanks!

Ryan

Hi all!

I am looking at purchasing a property in Chicago using an FHA loan. It is a 2-Flat property, so I would live in one side and rent out the other. This deal fell through once before with a different buyer because the inspection revealed about 50k worth of work that needed to be done in order to comply with FHA requirements. My realtor and mortgage lender both suggested using a 203k FHA loan. They both warned of finding a good, compliant contractor to do the work for me. Has anyone here worked in Chicago and knows a reputable contractor who can fulfill the requirements of the 203K FHA loan for me? I think I will pull the trigger on this property, but I want to be prepared. Furnaces (2), roof (flat rubber roof) and a couple windows is most of the cost.

Thanks!

Ryan

Thanks @Anthony Wick - Learning opportunity at the least.

Thanks @Mike McCarthy - We certainly have re-done our numbers. Although even with the lower rent it is not a bad investment, it does not hit our target metrics that would trigger an offer. Good point about the tenant willing to pay extra! Something to think about as we move forward.

Thanks for the advice @Marcus Auerbach. We are hoping that's the case with the current landlord being unmotivated to make the changes. 

I appreciate the advice @Casandra M. - I think we will consider putting that contingency in our offers from here on out as well, along with taking the advice from others. We did find that in the lease, the seller promised several repairs to the tenant including a new appliance, door, and lighting fixtures. We haven't yet gotten confirmation that those have been completed, and are hoping that they don't fall on us to honor for the tenant. 

@JD Martin - Yes, we used the non-vacant unit as a comp for the vacant unit. There are some small differences that we took into account. We are not intent on having no pets, but $1000 with 3 pets is a big difference from $1000 with no pets. 

Thanks for the reply, Cassi - So when you say you try to get a copy of the lease as soon as possible in the contract period, do you mean after you've had your offer accepted?  In this region of Wisconsin, offers are typically made on these properties on the first day they are on the market. Once we had our offer accepted, the first thing we did is request the current lease. 

We recently had an offer accepted on a duplex. One side is rented and the other is vacant. The MLS showed a rent amount of $1000 for the rented side. We estimated the rent on the vacant side and made an offer based on those numbers and our metrics that we want to hit. Our offer was accepted. A few days later, we collected the lease for the current tenant and came to find out that the rent is only $850, with a $150 pet fee (3 pets at $50 each). With that rent amount, we would not have made the offer that we did, or even offered on this property at all. At this point, we don't know how to proceed.

Are we at fault for not making sure that the rent amount is indeed accurate? Do you think this was a misleading tactic used by the seller, or is this a common way that rental income is reported? The market we are in is extremely hot for sellers, such that most duplexes have multiple offers at or above asking after only a day or two on the market, which makes it difficult to request additional information ahead of making an offer, such as the lease, yet remain competitive and timely. 

We have not yet made a decision to remain under contract with the seller or back out of the deal, so any input would be greatly appreciated.

Ryan