Out of State investor is being sued by the city of Chicago for $ 860,000 in fines. $ 7000/Day fines. This is pure harassment by the city of Chicago but it true. I have copied his entire email to me just as a cautionary warning. I am not trying to be negative. The point is it's your hard earned money please pay very careful attention to your investments. The rules are very different when you are investing in the Suburbs compared to the city of Chicago.
I am writing this just as a FYI to all investors in General. Not sure if this is only in Chicago but it's senseless.
I recently got a call from an CA investor regarding a property in the City Of Chicago. The long and short of the short is that.
This gentleman is 66 years old. Bought a property in the City Of Chicago in partnership. Partnership did not workout. Bought out the partner and tried to flip. That did not work so he ended up renting. That didn't work out well. Then had an eviction and property was vandalized. He is out of town and did not know. The city marked the property for demo notice. YES in Chicago if the property is abandoned it will get demolished by the city due to violations. This is not a threat it is real.
I have tried to forward his case to a couple of different lawyers but this is a mess. If you one can help him I would to happy to put you in touch with this gentleman. We have 150+ single family houses in the Suburbs of Chicago but not in the city. This property is in what I would deem as a bit of a challenging area so I cannot buy it from this gentleman.
If anyone can help please reach out and I'll be happy to put you in touch with this investor. I have spoken with him and he seems to be on the ball. His correspondence below is very detailed.
Andrew.
(BELOW ACTUAL CORRESPONDENCE BY THE INVESTOR WITH THE CITY)
RE: summons notice # XXXXXX
Dear Sirs / Madams,
I do not understand the summon notice as I have attended to each and every communication from local, City and State authorities since I purchase said property. In direct response to the stated complaint, I disagree with the charges stated. Yes, at that moment in time, the statement is correct. However, this is not ongoing, was not extended, nor was it ignored. I now have a manager/contractor who is half finished with all the repairs and has a tenant signing a lease this week. As I am located in XXXXX, it is outside my physical abilities to appear in person to challenge the statements as listed on the Summons. Please let me know how I can best attend to this circumstance and continue forward in providing a decent rental house for another resident of the City of Chicago. On a personal note, I was worth a Million dollars before the market crash in 2007. Since then I’ve lost everything except for this house.
Now the only thing I have for retirement is this house, and I’m 66 years old. Please don’t take this house from me and bankrupt me. It’s all I have left.
Sincerely, XXXXXX
Summary of events: I just received notice in the mail on 3/17/16 of a lawsuit against me for failing to secure a vacant building and for not doing some needed repairs. The house has been boarded up and secure since a few days from that date that I was make aware of the situation back in October. I have made every effort, along with my property manager, to keep this building in top condition as noted below. The house was vacated a few days before it was inspected by the city on 9/18/15. Apparently it was broken into and vandalized between those two dates. I didn’t get the notification until receiving a condemnation letter 5 weeks later on 10/26/15. As soon as I found this out I went right to work on getting it fixed. Unfortunately my property manager quit a month later (11/30/15) and I spent a few weeks looking for a new property manager and a contractor to make the repairs. This was over the Christmas holidays, but I finally found a person that qualified as a property manager and contractor on 1/16/16. He has been working on the house for several weeks now and is about half done. The repair work will be done by the end of April, and the house available for rent or purchase. The house has been boarded up and secure until recently when repairs started a few weeks ago. I am located in XXXX, CA and depend on a property manager to communicate with me and take care of any problems. I have always responded as quickly as possible, but it just can’t happen instantly due to remote management, finding contractors, getting bids, making a selection, getting on the contractors schedule, etc. To date I have invested over $113,000 in this property and I intend to finish the repairs by the end of next month. All items on the lawsuit have either already been taken care of, or they are being completed over the next 6 weeks. I already have the water and gas turned on. The electrical will be connected this week. I didn’t know anything about a vacancy form, and my property manager didn’t either, so I had no way of knowing it needed to be filed. I already have a person that wants to rent and another that wants to buy it. Below is the history of my ownership for the property. I hope you can see that I have always been a good caretaker to the property even though the tenants have not.
Sincerely, XXXXX
Ownership History
6/2/2010 - Purchased: in partnership with XXXXXX for $38,000 property cost. Title policy was for $41,000. My investment was $38,000 for acquisition and $38,000 for rehab, or $77,630 included closing costs.
8/10/2010 – Rehab started. 10/27/2010 – Major rehab complete. See photos.
11/10/2010 – Listed for sale for $120,000
1/26/2011 – Re-listed for sale for $120,000.
2/11/2011 – Reduced price to $99,000.
3/28/2011 – Removed listing.
4/20/2011 – Listed with new broker at $120,000.
4/30/2012 – Cited for weeds. My partner didn’t keep up the yard as agreed. Paid $660. 5/8/2012 – Bought out partner.
5/9/2012 – Hired XXXXX property manager.
5/25/2012 – Spent $6,240 on repairs and landscaping.
6/1/2012 – Rented house for $1,200 per month
10/30/2012 – Renter moved out, leaving damage. Spent $3,375 on electric, carpets, plumbing, furnace and water heater.
1/16/2012 – Rented house for $1150 per month.
1/5/2013 – Tenants were out, repairs made. See
1/5/2013 photos.
5/28/2013 – Added sump pump to basement for $1,600
10/5/2013 – Total repair expenses (no management or insurance fees) from 5/9/2012 to 10/5/2013 = $15,364 (see attached below)
10/31/2013 – Evicted tenants. Cost $575
7/7/2014 – Found out I was not getting the tax bills. Brought current for $11,114.
9/1/2014 – Rented house for $1150.
1/1/2015 – Repairs $280
2/1/2015 – Repairs $525
3/1/2015 – Repairs $820
6/1/2015 – Approximate date of starting the eviction process.
9/15/2015 – Tenant finally left premises.
9/17/2015 – Someone called in a report that the property was vacant, open, and hazardous. 9/18/2015 – City inspected property and found it as the former tenant left it and reported it. 10/26/2015 – Got a letter of condemnation from the city. It was dated 10/9, postmarked 10/13 and I got it 10/26. The expiration date for demolition stated on the letter was 10/24. I called and emailed immediately to avoid demolition.
11/1/2015 –House secured. Doors and windows boarded up.
11/30/2015 – Property manager (XXXXX) quit. Started search for new manager and contractor for repairs.
1/16/2016 – Got a new property manager/general contractor, XXXXXX.
Today – Repairs are almost done. Gas and water are turned on, and electrical will be connected this week.
