All Forum Posts by: Sean McKee

@Cristal A.- Everyone pretty much summed it up. 60 AMPs is not adequate for modern homes. From the photo you sent you have some old wiring. I've dealt with outdated electric a decent number of times.  All it takes is one outlet to go bad and then all the lights on that circuit start to flicker. You will go to try and replace the outlet and the cloth is all burned. At that point, you need to just rewire the unit. The problem with the outdated electric is it can be fine for years without any problems and then suddenly it goes bad.

 If you do have to do a full blown rewire/remodel, that will be hard to do with a tenant in there. It can be a very messy job and will probably upset your tenant. If you are legitimately going to bring everything up to current code and possibly do other remodel work, you might have a case for nonrenewal to make the required repairs. I'd contact a lawyer and make sure you actually do all the required work. If you just end the lease and rent it again without doing repairs, then it will more than likely be considered retaliatory.  

@Rob Hayes

Please see link.

https://www.illinois.gov/gover...

“Executive Order 2021-13 (Residential eviction moratorium):

Sections 1, 4, 5, 7, and 8 Executive Order 2021-13, as amended by Executive Order 2021-14 and Executive Order 2021-19, are re-issued and extended through October 3, 2021, whereafter Executive Order 2021-13 shall be rescinded.”

It probably hasn’t fed through the media yet. Hopefully it really is the last extension.

@Wesley Rugg- I wouldn't go over 80% ARV- Total rehab costs(repairs, holding, etc) if you are doing rehab to rent project. If it needs as much work as you say it does, paying 95K will mean your essentially buying it a full value when factoring in the repairs. Your initial offer price was not a bad starting place. They don't seem motivated enough and 95k is too much to pay in my opinion.

@Trevor Bond- It depends on the situation. If they are month to month, you probably don't want the entire building to go vacant at once (loss rents, increased security cost). If they have yearly leases, yes I would let them know ahead of time.

Stuff can get very dicey when buying distressed properties with tenants living there. I actually had a near disaster. One of the tenants had a "gas leak" a few days after closing and got "sick", so they weren't going to pay. Then another on the same building refused entry and refused to pay rent. This was during COVID moratorium, so with advice/help from my lawyer, I ended up paying a total of 5k for them to leave in two weeks. I budgeted around 2,200, so this was definitely not ideal, but that's the risk you take with these kinds of buildings sometimes. I doubt you will have pay this much, if anything, as you are in a landlord friendly state and the moratorium has ended. 

If they still have 6 months left on leases when you take over a building, that is plenty of notice. The best way in my opinion is to be real with them and let them know the building needs a lot of work to bring it back to standard. They likely already know this and will likely accept it and move off. 

If you plan on buying a distressed building with tenants on it, I would just make sure you factor in the potential for issues in your purchase price. With good interpersonal skills and the preparedness to take action should stuff go wrong (cash for keys/eviction), you should avoid any kind major disaster.

@Trevor Bond I have done this a couple times. I think it will be unlikely you'll have perfect tenants if it is a serious rehab. Usually there is always one bad one if the properties weren't maintained. 

If you were truly to get perfect tenants and they were fine with paying market rents with improvements done, a lot would depend on what kinds of improvements you are making. If you are having to do serious electric , plumbing, HVAC, or layout changes, it probably won't work out well.  If it it's more surface work, like painting, light fixtures, new cabinets, etc, you could likely accomplish it.

The more likely scenario is that you have one really bad unit that you can start on either through terminating the lease or offering the tenants some kind of move off incentive. You can then fix this unit and any exterior/common area work. You can let the remaining tenants know you plan on increasing rents and offer one of them the updated unit for higher rent. If they accept it, you can rotate them into the updated unit, and fix their old unit.

I've never had this happen, once you mention all the repairs you have to do and the rent increase, they will likely move out on their own within a few months. I've only had one person stay.  They were already paying market rent and had a year lease. I had to re-pipe their bathroom as part of broader building update. They were a constant headache despite complaining their bathroom never worked.

Lastly, a lot will depend on if they have formal year leases or just verbal month to month. If they are month to month, then you can proceed with terminating the leases if you wish. If they have year leases, you'll have to abide by the terms.

@Wesley Rugg- What is your projected ARV of the 2 unit once you have completed renovations? I'd go with your gut regarding the tenant being a potential headache.

 @Jonathan Klemm I agree with Baris.  There aren't enough landlords to cause a lot of push back.
Landlords are outnumbered by tenants, former tenants, and people who simply don't care about landlords. The truth is landlords struggling doesn't really stir the same kind of emotion in the broader public as their favorite restaurant closing.

You are correct, there's not a lot of hard data to support this extension. The Governor to my knowledge did this very discretely and did not provide a lot of details on why.

@Aaron Zimmerman. I read a news articles about the Governors intention to extend till 10/3, it is not an official executive order yet. We will probably find out for certain what his intentions are this Friday.

@Sandeep Agarwal- I would check your local laws. A lot of places you either have to hand serve them, post, or send by certified mail.  I assume in Connecticut you only have to give them a 3 day notice or quit? If so, assuming you served them proper notice you could turn it over to a lawyer and go to court. Again you would need to consult your local laws.

If they are only 3 days late, hopefully the email wakes them up and they let you know they won't have it until the 10th or something.

@Rob Hayes. Please see link below.  He has not officially released another executive order, but a spokesperson says he intends to extend it to 10.3 to match when the CDC ban would have ended. So I would expect him to further extend it, and hopefully he decides not to.  He kept his decisions to extend it very low key and I almost missed it. I hope I am wrong with him going past 10.3.

https://chicago.suntimes.com/c...


"A spokeswoman for Pritzker said Friday the state’s moratorium, which was slated to end Sept. 18, would be extended to Oct. 3 — the date the federal moratorium was to end."