Chicago: Condo woes...please help me solve this problem...
Hola BP. First, I'm new on this forum. If I'm posting in the wrong section of the site please let me know and I'll make the appropriate move. Brace yourself, this is crazy, crazy, loooong story.
I have a rather 'unique' situation, as my attorney describes it. In 2004 I purchased a 2bed, 1bath 950 sqft condo in a 6 unit building in Chicago. I lived there for 9 years and moved out last year. When the market crashed, so did the value of my condo and I could not refi or sell (I tried HAARP, my current lender wanted me to pay $1200 in cash upfront in fees, WITHOUT an approval, I refused and gave up after that). I put a tenant in, a young couple who is ALWAYS late on the rent but keeps the place immaculately clean and doesn't cause any trouble or noise.
Problems--there are a few: 1. the building is in disrepair and there is no HOA in place. None of us have paid HOA dues in years. 2. The gentleman that was 'managing' the building, paying common bills and overseeing simple repairs, has disappeared. He is not answering phone calls, voice messages, text messages, email or social media. I have no reason to believe he is hurt or dead. I will identify him as John. I don't know how any water, electric or gas bill is getting paid. The building is in disrepair and I'm concerned that very soon a 'final notice before disconnection' will pop up and it won't get paid. 3. Of the 6 units, 2 are in good standing with their lenders (i'm one of the two), 2 have been foreclosed and are in the bank's possession and 2 have lis pendens and will soon be in the bank's possession. I know this information because I completed the research on the county assessor site (and my attorney confirmed that I am correct). 4. I'm trying to foreclose on the bank owned units so that, per my attorney, I can put tenants in them and collect rents to get the building up to par. The problem is that there is no HOA and starting one has proven to be quite difficult--i can't reach the other owners or they claim they can't afford $25/month in dues. Yes, that's right, $25!
Why we haven't paid HOA dues: When I purchased in 2004, John volunteered to handle all the money and repairs. He did a great job until about 2007 when he decided to refuse any requests for itemizations of the funds. One unit decided to stop paying until John gave transparency of funds. He still didn't. Then another unit stopped paying and so on...however, all the bills were paid nothing serious went wrong..until now. I suppose it was easier for us all to ignore the situation. :(
Background: There is no insurance on the building. I can't even insure my unit because the building does not have insurance. Only one of the original owners is still living in the building; he has been in foreclosure for four years. I'm expecting the bank to take possession any minute. Four of the units have tenants--John illegally put tenants in one of the bank owned units, my unit has a tenant, John's unit has a tenant, the other unit in good standing has their family living in it. The final unit is bank owned and vacant.
Investing Opportunity: I want to purchase the 2 bank owned units (and eventually the two that are delinquent). By purchasing with hubby-to-be my attorney says I will have majority ownership in the HOA, can make necessary decisions, I can finally get the building up and running again\ by foreclosing on the other units for lack of assessment payment and use that money to make necessary repairs and pay common bills. BUT, I don't have the cash to purchase the two bank owned units. I don't know the reserve but I know they are not accepting anything less than $25k. I'm estimating $70-80k for the two units would appease the banks. The units don't need to be rehabbed, maybe just minor repairs. I know this building like the back of my hand because I lived there for 9 years and have owned it for 10 years. I know the neighborhood. I'm familiar with the layout of all the units as I've been in them all multiple times. Renting the units would be easy as I've never had a problem getting tenants.
Question: How do I protect this 'investment' before things get out of hand even more?? For obvious reasons I can't get a bank loan, it will need to be private or hard money. From where can I get the money to purchase the two foreclosed units? There has to be a way to do this, what angle am I not seeing? Is there a creative way around all these crazy deficits? is there someone I can call/write/meet for assistance or advice?
Is this not the strangest true story you've ever heard???