All Forum Posts by: Bob Floss II

@Joshua Rawe Bad advice, a huge portion of my closings on 2 and 3 flats are with FHA owner occupied buyers. I would question if the agent is familiar with the market. They might be pushing you away from doing a 203K loan, which can be a pain and frankly many don't close, but the payoff is huge for the borrower. Regardless, the comment about FHA is nonsense.

@Aja Devaney An admirable business plan that could work, but remember to factor in the sellers looking to sell their properties and take a loss during this market might be the same properties with poor performing tenants. You will be able to help a lot of people, but you could also get taken advantage of by a lot of people. 

@Brie Schmidt Thanks for the mention.

@J Folsom Removing the kitchen doesn't make it a single family. Zoning will continue to classify the property as multi until a formal change is made. There are a few reasons to make the change like any negative effects the zoning could have on your appraisals and your real estate tax bill. However, there's also risk of going through the process of getting zoning changed and the city making you do significant alterations on the property. If the appraisal goes through without an issue, I might lean towards leaving it alone for now. 

@Tyler Frost @Stephen Brown Honestly, when I meet with a new investor, I ask them to tell me about themselves and then about their business strategy. I take your personal situation and your professional goals and put together my suggestion on how to set up your asset protection plan. I know you are looking for more specifics but it's really hard for me to do that without writing a novel. Just know that whatever attorney you meet with should take the time to sit with you, hear what you have to say, and craft a plan tailored for you. If they are in a hurry to put you in a 'package' or don't ask you any questions, they are probably not the right attorney for you. My initial consults typically take an hour to two hours. 

@Ethan McRae There are a few details to make it a legally binding contract, but odds are you can make binding when you two sign it. Just my two cents when it comes to partner contracts:

1. It will take a lot longer than an hour to review; because

2. Partnership agreements tend to be lacking when you do it yourself. They either rip one off the internet that looks good, but is filled with fancy language that say nothing substantive, or is only filled with language dealing with how much money you are going to make. A good partnership agreement needs to address all the scenarios where things can go wrong. 

@Francis Rusnak@Jia Lin Follow through on the advice from @Francis Rusnak and make sure others know of the contractors work. You'd be surprised how often contractors leave people in a bad spot and nothing happens.

@Silvia Falip There's been discussion among the legal community to file a class action. The City of Chicago requires the water account be paid in full in order to activate water service at a property. There are hundreds, possibly thousands of cases of properties that were vacant, water service turned off, but the water department randomly began accruing new water service charges on the property. If the property can't turn on the water, why can the City randomly decide to start billing? When we go to do closings, the City demands thousands of dollars for a non-existent water account and won't allow you to close without it. Clients get strong armed into paying it or not close.

I've tried fighting these cases, but the City uses the section of the Code requiring all vacant properties to be filed as a registered property as defense. If they didn't have notice the property was vacant, they assume someone is living there and using water service. Curious they can assume someone is living there and bill for water use if there's no water service.

@Rich Hupper You can absolutely get title insurance on a REO property.

Title insurance insures clear title to the property as it relates to any party that might have a right to ownership of the property or interfere with your ownership of the property. That does not extend to possession of the property. Your owners policy with not cover you for holdover tenants in the property, that is your responsibility. The title insurance will cover you for anything related to the underlying foreclosure case, sheriff sale, and things like unpaid taxes. 

@QuoVadis Gates You have to remain fluid and read the market. In 2008, everything came to a screeching halt around the summer or fall and getting through the winter was a grind. Everyone wanted to sell but very few buyers could get financing. Keep in mind prices didn't really settle until around 2010 so for two years the Realtors were telling everyone to buy because things were so cheaper, but prices just kept falling. Most Realtors that survived had to learn short sales. The Realtors that turned their nose up to it really had to struggle to survive. The short sales at that time were a TON of work but they also paid out huge so it was worth it.

I don't think the economy will crash enough for us to see everything turn to short sales. Talk to lenders and credit repair people to be well versed on how buyers can get qualified if they were furloughed or got a forbearance on loans. 

@Stephen Rembert No.