All Forum Posts by: Sean McKee

This is honestly a very state by state experience for a lot of landlords. While there was a national moratorium for a while, the levels of enforcement and loopholes varied by state. Illinois was unfortunately one of the tougher states to operate in. I assume your family member owned in Illinois?

Your relative might have made some mistakes, but he also frankly got unlucky. Who could have predicted COVID? It's good that you are trying to learn from his mistakes.

To answer some of your questions. Evictions were pretty much nonexistent in Illinois. You could still file, but it would get tossed. Basically, the only reason to file was to go to court for breach of contract. You could get a monetary judgement, but the tenant still would not be removed from property.

I had two tenants stop paying. One accepted a cash for keys deal after 2.5 months. The other fought a lot harder. We ended up filing for an eviction in June of 2021 and she left after a few weeks. I actually faired pretty well. I had sizable reserve and other units to cover during the 5 months of lost rent on those units.

There were programs to support tenants, but not enough money to cover all the rent. I read one statistic (not verified) that out of 64k applications for a second round of funding IHDA, only 27k were approved. If your tenants did not get approved, you were left holding the bag.

Honestly, COVID made me a much better landlord. It was pretty awful if you had tenants not paying, but you learned to handle the stress and adapt to the situation. My takeaways: have ample reserves, tenant screen, report to the credit bureaus (you were still allowed to do that in Illinois) and toughen up. It's not an easy business, no one frankly cares about you as a landlord. Be fair, be understanding, but know when to draw the hardline. And like @Charles Carillosaid, it probably doesn't hurt to be in landlord friendly jurisdictions. 

Hopefully we get 200-year hiatus from this kind of event!

 Funny you mentioned it. Brighton Park is another area I'm actively looking at as well. It looks like a solid area.

 Thanks for the information. Do you know the most stable parts of East Chicago?

 I’m looking for as a potential future investment. I’ve mapped out Hammond pretty well, but would like other options in NWI. My main concern was higher than ~6% vacancy and lack of demand. I’m used to relatively low vacancy markets

Hello BP and NWI investors!

Hopefully my questions will be fairly straightforward and easy to answer.

I’ve done a decent amount of research on Northwest Indiana, however I still have some gaps on East Chicago. Mostly the regarding the rental demand.

How hard is it for you to find tenants? What is your typical vacancy? Can you attract quality tenants?

Thank you for any insights!

@Kurtis R.

I had the same issue a few years back. I spent about a year calling 30+ banks and had few denials on the application. I finally found one that would actually do it. Like people have mentioned above, they do exist. I found each bank has their own nuances. Banks are much more risk adverse to investment lines of credit. You are probably better off searching credit unions and smaller banks.

I would keep researching and cold calling if you really want one.

@Jesse Harris- Your ball parking method is very similar to what I would do. I have a rehab spreadsheet that I use to price repairs. If I had to make quick offer, I would use an abbreviated version of my spreadsheet and combine it with a price per square foot method.

Hopefully I’d be able to make a relatively accurate offer and have my contractors confirm it during the inspection phase. If it’s way off, hopefully there’s room to negotiate!

I think the accuracy of quick estimates are going to depend on the scale of repairs. If it’s strictly cosmetic/surface work, you’ll probably be able to pretty accurate. If it’s a big renovation involving major repairs, there’s a much higher chance your estimate will be way off.

- In Chicago you definitely need to give them notice to raise rents or terminate lease. You should refer to the Fair Notice Ordinance for details. You can find the information at this link. If they have lived there less than 6 months and they are month to month you can give a 30 day termination notice. Otherwise I would refer to the Ordinance listed above and ask your attorney if you have any doubts.

As far as mortgage qualifications I don’t want to speak for all banks, but every time I have done it they use current rents. You can request the rent roll, leases, etc during the attorney review/due diligence phase.

Good Luck!