All Forum Posts by: John Clark

People are putting the cart before the horse. The goal is her education, the secondary goal is financing it.

She may not like college. She may not like being a stage designer. ANY debt is too much for a degree you don't use and a job you don't like. As others have suggested, she should start with a good community college and get her distribution requirements out of the way (foreign language, sciences, etc) and try to get some course work and internships done in her chosen field. If she takes two or three years to do that (with a job so she doesn't go into debt) and lives at home, then she can see what's out there for jobs and degrees in her chosen field -- it may not be what she's gunning for now. Then she can plan concretely.

Cheapest rates would probably be with a commercial mortgage, and the bank will lockbox your rental payments.

Biggest factor will be why you have no income.

Quote from @Matt M.:

I spent 6 mos on a complete rehab by myself, put in about $15k.

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 Unless you value your time at zero dollars, you put in more than $15,000.

Also, see if there's anything in the proposed contract against you assigning the contract to someone else. There shouldn't be anything. If you are to be as "passive" as the buyer wants you to be, then the buyer should not care who is getting the money. If the buyer does care, then you know the buyer is playing you for a chump somewhere down the line, for whatever reason. 

Even if there is a no-assignment clause (and ask why it's there), shop the proposed contract just for grins. That would tell you what the contract is really worth and what others think of the credit and counter-party risk you'd be taking on. If you can sell the contract, then doing so would give you money for your next investment.

Quote from @Gabbie Decu:

Good morning to you all! 
I would really appreciate your thoughts on structuring a Seller Financing offer with 2 agents in the middle. 
The seller has owned this property for 23 years  (free and clear now !)

Asking price for this triplex is 800K .

All 3 units with rentals - expiring Feb 2023, June and August. 

What would be the best approach to start the negotiations? 

Thank you for all those who will take a moment to share their input. 

Are you talking about the seller making an offer to the buyer, or vice versa? How much is the buyer putting down? If the down payment doesn't clear the closing costs and commissions and give the seller enough money to fund litigation to foreclose and buy out tenants, with the seller's reward being appreciation or enough money to call "interest" on his financing, then you have no chance.

Quote from @Mauricio Castro:

Hi all,

I have a walkway to my house that has been raised due to tree roots growing underneath it. I am getting someone to chop off the tree real soon, but I wonder about the walkway itself. When I rent out the house to a tenant, could this be considered a tripping hazard and come back to haunt me later or am I overthinking it? The slab in the picture below is raised about 2" on the highest side.

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Yes, it WOULD be a tripping hazard and you would be liable. Contact a concrete contractor and see if it can simply be ground down to level. From the looks of it though, you might need to have a walkway section sawn and cut out, a portion of the root removed, and new concrete poured. The public walk loooks damaged from the same root, too. You'll probably want to fix that at the same time.

Get you head examined. Chicago has high taxes, is pushing for rent control, and is extremely -- note the word -- tenant friendly in it laws. Ultra tenant friendly in its politics. If you insist on pursuing your folly, look at the southwest side.

Quote from @Junior Baez:

Quote from @John Clark:

"The 2 flat is metered so it changes slightly for each month based on tenant water usage. I should look at adding a second meter and hot water heater and move the water bill over to the tenants so I could save almost $1000 a year. "

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You'll have to branch your service line before the meters in order to do that, and alter the sources for your lays for the second apartment. Should not be too much of an expense, but count on a few thousand dollars, anyway.

John have you submetered in Chicago?  I have been offered a 6 unit apartment.  But, I had 2 major concerns.  For 1, it's not metered & 2 will I be able to submeter the property.  The person selling me the property said it's "illegal" to submeter the property, but that doesn't make much sense.  

 I'm not talking about a second meter after a first meter. I'm talking about branching a main service before the meters and having one meter on each branch with no prior meter on any line.

Quote from @David Galea:

I put an offer on a home without knowing it was " sold as is" until the last minute and my real estate agent pressured me to make a decision without explaining the consequences of no contingencies. Later i found out the home is 500+ square feet smaller than advertised and it was in an "A" flood zone as well. Am I entitled to get my $3,000 earnest money?

1. Now you know why I hate real estate agents.

2. Why are you asking strangers on an internet board a legal question? (getting back your earnest money). What does your lawyer say? You HAVE spoken to your lawyer, right?

What do you think prices will do in your area over the next two years?

What are your family plans over the next 5 or so years (meaning -- might you lose wife's income due to pregnancy, etc.)

If the profit from the AirBnB is $20k - $30k a year (after paying its mortgage off), is that enough to pay your mortgage? If not, how much of a dent does it put in your mortgage?

Not enough information. Take worst case scenario and your monthly payment increase is $825 (simplicity). Month of vacancy for current tenant move out so you're out $3100. Good thing is that current tenant vacancy doesn't hurt your situation, since you are incurring that vacancy loss in any event.

How long will it take you to find a new place? How long will it take you to find a new tenant for your current place. Worst case is that you move to a motel for two months while your current house is full (at a gross increase of at best $1,700 in rental income) and you're waiting to close on your new house.

Run the numbers.