All Forum Posts by: Sam J Mrofcza

@Paul Brown

I grew up in Lombard and now I live in VP, also a Broker, but you can tell that from my signature.  

I love these two towns, I don't think the margins are asgreat as you describe but all the other points you make are very valid. I just put a duplex in VP under contact last month that will be around a 15% CoC return on day one, as it has tenants in place. South Villa Park especially has large lots, and 50 60s era homes that are ripe for rehab, and in some cases tear down. In fact that's exactly what my brother and I did a few years ago, purchased a SFH on a large lot and subdivided to build two homes.

A word of caution, the Village of VP does seem to have some type of aversion to residential development.  I have a horror story that is much to long for a post, but the bottom line is just make sure you ask a lot of questions and get them engaged early on.  

In any case I think you picked two great towns to focus on.  Happy to talk anytime, don't hesitate.  

@Jose Guillu

I would say move them to the bottom of your list.   

LLCs could still be people that have only 1 or 2 properties.  If you have time to look into the LLCs closer you can get a better idea of the owners.   Going out to cyberdriverilkinois.gov and searching  the company name is a good place to start.  At that point you see if the agent of the company is a real person with a real address, of if it's a corporate  servicing company or maybe an attorney.  

I digress, as you see if you have the time to research and scrub the list there could be some good in there.  If not I would put those aside and circle back when you have time to  dig a little deeper.  

Cheers

First off congrats on getting out there.  Take a moment and acknowledge how exciting that is.   

Next, I am not an attorney and do not claim to be an expert on foreclosure law here in Illinois, but I will take a stab at answering your question. 

Being that Illinois is a Judicial process State when it comes to foreclosures, meaning it has to go through the court system, the lender has to file a suite against you and there is a timeline of when responses are due and even a redemption period that extends up to 7 months after being served where you can retain the property if the note is paid in full including costs etc.  Now I am not sure how often that happens, there are a wealth of people on here that buy form the courthouse steps that may be able to offer better insight. 

Cutting to the point - Lis Pendens which is Latin for "suit pending"  is the same as a Notice of default, at least here in IL.  Depending on the state it may be called one or the other.  I think because the sites that sell lists are covering many states they may use these two interchangeably.   

Similarly Notice of Foreclosure sale and Notice of Trustee Sale are intertangle.  

I would say target the former, as the latter already have judgements against them.   Its also worth noting that if you have the data mining capabilities it maybe worth the time to try and determine if an owner has equity in the their property but is falling behind for another reason.  Meaning if they owe 300K on a home that's only worth 200K, it won't do them or you any good to try and purchase it.  If the inverse is true, they owe 200K and its worth 300K but they can't make payments because of a loss of job, injury etc, then perhaps a deal could be made that allows them to get some the equity out, and keep a foreclosure off the books.   

Good Luck.   

Cheers
 

@Sunny P.  You can always close with cash and then refi, but keep in mind what @Julie Falen had to say about obtaining financing on a condo.  It will more than like have to be a conventional loan, which in your case shouldn't be an issue since you clearly have the cash.  

Everyone else comments for repairs/cap ex/financial status of HOA are extremely valid too. Every deal is different, so you have to exam the condition of course but unless you have a 20 y/o water heater furnace and center a/c unit i try to simplify the cap ex/repair budgeting process by just putting aside $1000 per year per unit. Again every deal is different.

Good Luck boss.  

DJ, 

Good luck brother I am sure you'll do great.  The math stuff is pretty simple, no phones allowed so make sure to stop at Target/Walmart etc to get a cheap calculator.  I used a site called examsmart.com to help study, it is an additional $50 but I thought it was well worth it, they have over 600 questions in their database and they are the style you'll see on the exam.  

Sam 

Sunny, 

This sounds like a good deal to me, just on thought   

1. Depending on how many loans you already have paying cash might not always be the way to go. I rather enjoy using other peoples money, while my renters pay down the principal. EX. Lets say you finance 70% so you take a loan for 112K, (not including Tax/insurance) your P&I would be ~$520, add in your HOA/CapEx and call it $820. So your down payment was $48k. $1500 - $820 = 680 x 12 = $8160/$48K = 17% COC return. Now of course you have to pay the interest on your loan but thats also a good write off if you need one and you're still cash flowing $8K a year. Just a thought.

In any case it looks to be a sound investment, especially if you already own two units and you're managing them yourself.  

Good Luck Brother.  

Sam 

@David Stone I am not 100% sure how it works in your area but In Illinois we use a standard contract, known as the 6.1 Sales contract.  There is a section in here to fill out for cash offers.  A typical contract will be dependent on financing, also refereed to as a Mortgage Contingency.  This basically says that unless you get approved the deal is off.  So when its a cash deal there are two options on our contract, one is for a straight cash deal, the other is still a cash deal but it gives you (the buyer) the option to still get a mortgage.  Basically you're saying to the seller that the contract is not contingent on financing but you still have the option to try and get a mortgage if that is what you choose.  In either case here you are not allowed to hold the deal up due to financing issues.    

When I make cash offers ( I use a private lender as well) I always choose the second option.  If you take a look at the link I added above the Mortgage contingency is paragraph 8 and for cash offers you leave paragraph 8 blank and fill out paragraph 36, oh which I always use paragraph 36 b.  You need to talk to your lender and be absolutely certain of their terms and requirements. 

My advice is to make as many offers as you can, your agent might not like it, and you might go through a couple of them in the process but this is a contact sport, and the numbers matter.  

Good Luck!!!

@Derrick Casson Welcome boss.  As many have stated this site is a wealth of knowledge with seemingly endless amounts of information.  Good Luck!!!

Scott  I could write a book and take the next hour or so on my response as I am dealing with a tough tenant these days in one of my properties but I'll save the horror story for another time.  After reading over your situation it looks like you have checked all the appropriate boxes (Smartmove, Criminal etc) except for one very important one, References my good man.

I learned two very valuable lessons while dealing with this current tenant of mine;

1. Always get and check references, if they say they don't have any from a previous landlord, then ask if you can contact their employer, or check facebook, linkedin any other place you think you can find some more info that will allow you to better asses them as a prospective tenant.    
2. Trust your gut.  If something seems off then I would say just move on, if you bought in the right area there will always be a need for your property.  In hindsight letting my property sit empty for a month or even 2 would have been well worth it.  There are many posts and blogs here about rental screening and why its better to have no tenant than a bad tenant.   

Good Luck  

Sam