All Forum Posts by: Tom Shallcross

Everyone looking to potentially wholesale should go back and re-read @James Heller's first comment:

"1. You should never enter into a contract that you don’t believe can be executed. This is the sole responsibility of a good wholesaler, because many of these sellers really need the sale to go through! Hence they are willing to sell off market and sometimes at a substantial discount."

These are people's lives and a lot of times they are truly counting on the deal happening. 

@Andrew Heinzmann - you Quick Claim the deed from your your personal name to your LLC for $10. I believe it's anything under $100 you are exempt from paying transfer taxes.

Below is an example of a Quick Claim Deed with one of my LLCs to another LLC with names and addresses crossed out.

Get an attorney who has done one before - I can refer you to my go-to - and it's a very simple process. Note your lender may have the right to enact "due on sale clause. It's an extreme long-shot, but at least be aware it's out there (or just quick claim it back to the original if they ever say anything). 

@Aaron Zimmerman - is an investor and investor-friendly accountant in Chicago that can assist. 

Below is an interview we did with him that outlines how he helps local investors: https://www.straightupchicagoinvestor.com/podcast/episode-52-saving-thousands-of-dollars-with-the-appropriate-tax-strategy-and-deductions

@Curt Thomas - @Brie Schmidt uploads the latest Chicago lease form to BP every year. Here is the direct link - Chicago 2022 Lease.

For CHA, you should reach out directly to request the rental increase. Below are the instructions: CHA Rent Increase Request

@Sandra Pinzon - there is a lot you can do to cover yourself whether you put it in the additional agreements on the first page of the lease or as a separate addendum.

Few boilerplate ones that come to mind.... no smoking in the unit, no structural changes allowed, tenant agrees to adhere to the City of Chicago's noise ordinance, spell out your vacating procedures when moving out, spell out who replaces furnace filters/smoke detectors, lights, only those on the lease can occupy the unit, any specific fees you want to add ($xx if need to change the locks). 

If they are bringing a pet you can also add a separate pet addendum listing expectations and responsibilities. 

As @John Warren stated, a lender likely won't care about the previous owner not pulling permits and this should not effect title unless there were open violations. And since you're using private money, no issue there. 

If you have plans and permits showing the existing condition and the proposed new condition, you should be fine. We have taken over several projects midstream that had violations and/or stop work orders, so taking over something that's been demo'd and is clean on violations doesn't make me flinch. 

For city of Chicago permits, don't worry about an expeditor but get an architect that is self-certified to help push the process along. We use @Samuel Pavlovcik for all our projects. @Prashanth Mahakali is another investor-friendly architect that others use to give you options. 

Lastly, validate all your holding costs and rehab costs and then add a buffer as this sounds like your first rehab and your agent doesn't specialize in these types of projects. Forecasting the rehab and what it will actually take to get the project across the finish line is a much bigger variable than the existing roof not having a permit.

Agree 100% with @Mark F. and similar to him I've used Renovo on probably the majority of the properties you see in my bio. 

From straight forward deals, to buying properties in demo court with cloudy title, they always come through. Feel free to DM me if you'd like an intro. 

The origination can be either. Typically it's some sort of percent and then they'll have a few "underwriting" or "processing" fees. 

As for a lender on your multi-unit, depends on several variables as each lender has their own areas of specialization - loan size (a lot of commercial lenders have minimum loan sizes), property location, is there a rehab involved, how long do you want a fixed rate....etc

Jared Kott of Marblestone Properties has a ton of units down there, lives in the area, is high immersed in the community, and also provides management. 

We had him on Episode 11 of the Straight Up Chicago Investor Podcast to specifically talk about the East side and Alphabet letter streets if you want to give it a listen and potentially reach out to him. 

It's going to take a LOT of supply to correct the market. It can and will eventually get to equilibrium, but we are currently WAY OFF.