All Forum Posts by: Bob Floss II

This thread is filled with great advice. The only thing I will add is, when dealing with commercial real estate, never ever ever EVER trust the broker representations on income and expenses for the property.

I would emphasize what John said, be smart and have reserves. Any expenses for the property need to come through the IRA checkbook and not through your personal expenses. The account needs to be able to maintain the property on its own without your help.

Anyone with a low amount to start may need to think about waiting until you have enough to build a safe reserve in the account or possibly lend to another investor first to get some returns. 

@Jack Martin I would email Chicago Title, the sellers attorney, and the seller and let them know about it. Someone will be responsible for it and it shouldn't be you. Let the three of them fight over who is responsible. 

This again? January of every year someone posts an article about how Illinois and Chicago are losing population. I did a deep dive back in 2018 and found some data comes from the census, but most of the data of population movement comes from moving companies. When I looked further, the same data showed Illinois had a medium or high level of outbound population since 1977. Chicago couldn't possibly maintain status as the third most populated city in the US if we have experienced population loss for 45 straight years. The data fails to account for undocumented inbound movement that is not tracked by census or moving companies.

We have arguably nine major universities, a couple dozen local community colleges, eleven medical schools, seven law schools, and eleven theology schools that attract tens of thousands of students every year that don't use movers for their mini fridge and futon. The data also reflected almost no movement in or out of Illinois for anyone under an income level of $49,000. Around 45% of those tracked in the data made over $150,000. Lower income, undocumented, or ESL population also have a track record of not participating in census data collection. Add all this up, and you end up with a huge gap of population movement unaccounted for and produces flawed results.

@Tom Gimer I'm sure the property went up significantly in value from 2008 to 2016 and the foreclosed owner was grasping at straws to get it back. It's common to see Motion to Quash in an attempt to stop the foreclosure, although they rarely win. The legal theory that the title company owed a duty to defend him was horrible from the start, I can't imagine the Judge didn't roll his eyes. Frivolous motions are sometimes used to buy time in foreclosure court until the client can come up with a different solution. 

This again? January of every year someone posts an article about how Illinois and Chicago are losing population. I did a deep dive back in 2018 and found some data comes from the census, but most of the data of population movement comes from moving companies. When I looked further, the same data showed Illinois had a medium or high level of outbound population since 1977. Chicago couldn't possibly maintain status as the third most populated city in the US if we have experienced population loss for 45 straight years. The data fails to account for undocumented inbound movement that is not tracked by census or moving companies.

We have arguably nine major universities, a couple dozen local community colleges, eleven medical schools, seven law schools, and eleven theology schools that attract tens of thousands of students every year that don't use movers for their mini fridge and futon. The data also reflected almost no movement in or out of Illinois for anyone under an income level of $49,000. Around 45% of those tracked in the data made over $150,000. Lower income, undocumented, or ESL population also have a track record of not participating in census data collection. Add all this up, and you end up with a huge gap of population movement unaccounted for and produces flawed results. 

@Jordan Gerkin Part of my attorney review is to review the assessed value and tax bill if we need to change the prorations. I'll give the buyer a heads up if the property is under-assessed or the tax bill is due for an increase. Like @Brie Schmidt said, this needs to be part of your underwriting for the property. 

@Andy Gill The bank will not negotiate. They still have a lien on the property and can just file their own foreclosure case and take the property from you. 

@Travis Pirtle There are a lot of complicated issues here that would need to be discussed over a consultation. One easy thing I can address is the possibility of a 1031 exchange down the road. If the property is in your name, when you do a 1031 exchange, the intermediary will require the way you held title in the property you sold to be the same as the property you purchase. You would need to be the named party purchasing a new property and go on the deed again. I recommend doing your planning now so it doesn't limit your 1031 later. 

@Jonathan Klemm All the time. As long as all the heirs are in agreement, it's pretty routine.