All Forum Posts by: Eric S.

I was in the exact position you are in about 13 years ago.  If I had to do it all over again, this is what I would do:

House-hack! Use that 10k towards as small a down payment as possible on a multi-unit building that needs some work. These buildings are popping up as reposessions on the MLS all the time, and since you are owner occupied, you will have first opportunity to purchase, ahead of all of the investors who will bid up the pricing.

Choose a property that needs work, but minor work.  Since you are living in the building, it will be much easier to self-manage and learn the business of landlording, which really isnt that tough once you get the hang of it.  Your goal should be to live for free-true hacking!

In a few years, do the same thing again!  This is a great strategy to build wealth in a relatively safe way that ensures a low rate and 30 year money!  Your rents will only increase over time, and think of the return you will get on your money over 10 years!!!!

Honestly, I wish I could revert to this strategy today.  

Real estate is not a get-rich scheme.  

I used robert miller on a deal about 7-8 years ago and was extremely impressed with him.

(847) 297-4961

Good luck!

@Greg Linder 

i have been managing rentals in some rough neighborhoods in chicago, and never wanted to take the chance on any type of confrontation with an angry tenant, so i have always mailed the 5 day notices (regular mail even) even though the notarization claims that it was delivered in person.  

the weird thing is that out of all the times i have appeared in eviction court, i have NEVER had a tenant or an attorney use the technicality of the 5 day notice being improperly delivered as a defense.  my thinking is that while the amount of rent due may be disputed, the eviction case wont be thrown out based on one person claiming it was properly served and one person claiming it wasnt.  eventually, the case is going to have to be heard.  

i have heard defendants claim that they did not receive the 5 day notice, and the judge then asks them what their response is to the amount.  im not sure it is worth risking your safety and chasing around after a tenant for the 5 day.  

also, im not sure that if you accept money after a case is filed that you have to refile.  that used to be the case in cook county, but was changed.  i cant imagine that it is the case in other areas of the state that are not as heavily regulated as we are, but i would check with an attorney.

i HIGHLY recommend that you use an attorney for evictions.  find one who specializes in them, and you will pay much less.  the attorney i use only charges $325, and it is money very well spent.  a lot of time a good attorney can serve as a buffer between you and the tenant to work out some type of resolution.  my attorney has resolved the situations with the tenant under an agreed order in about 60% of my cases.  

good luck! 

i agree with @Dooreuhn Cee .

I don’t see the logic behind this attorney’s interpretation of the RLTO.

• 1.where does it say in the RLTO that the tenant has the right to withhold rent and have that rent deducted from the security deposit? While it gives the landlord the right, in my reading I don’t see the tenant mentioned anywhere. Someone please point it out for me.
• 2.If the tenant is not given the right to withhold rent, you are not denying him anything by requiring him to make all payments in conjunction with the lease agreement. If the lease calls for 12 payments, 12 payments are expected. This is the most basic premise of a lease.
• 3.The standard Chicago apartment lease is written and updated yearly by attorneys who constantly litigate on the eviction floor. Trust me, they know the laws in and out and would never use language that violates the RLTO.

Remember that just because an attorney makes an interpretation, doesn’t mean that a judge will agree. My guess is that this attorney wants to lead tenants to believe that they have potential cases against Chicago landlords (which actually, most do because no one is reading the RLTO carefully) so that they will call him and he can file cases on their behalf whether there is merit there or not. There are many defense attorneys in Chicago who are making very healthy livings based on trolling Chicago landlord ignorance.

I’ve seen some crazy stuff in the eviction courts over the years, and most judges side on behalf of the tenants, but this is a stretch.

again, Don’t bother with security deposits, because if anything goes wrong, that is where the defense attorneys have most of their leverage. Take a maximum of 50% of the rent amount as a move in fee and do frequent inspections. If tenants damage the property beyond wear and tear, document it with paid receipts in conjunction with the RLTO and submit the claim to a collection agency that reports to the bureaus.  this has been my strategy for the last several years and has worked well.  

@Sunny Lamba 

There was an important Illinois Appelate Court ruling last year that clarified move-in/administrative fees.  Chicago landlords can charge up to 50% of the monthly rent and still call it a non-refundable fee.  Anything more than that would be ruled a deposit and fall under the RLTO for security deposits regardless of what you call it.  

Chicago landlords, DO NOT TAKE SECURITY DEPOSITS!  I was involved in a eviction case several years ago in which a defense attorney argued that since the judge did not agree with one of my damage claims deducted from a deposit, that it was a violation of the RLTO and should trigger the security deposit violation penalty.  The judge seemed open to the argument, and continued the case.  He later ruled in my favor, but reduced a 10k claim all the way down to 2k solely based on the tenant's testimony, even though I had photo proof.  Chicago judges are notoriously tenant friendly, and rule in the tenant's favor in all cases.

The latest legal hustle in Chicago are defense attorneys who are mailing postcards to defendants in eviction cases offering to represent them for free.  Then, they show up in court and demand the landlord pay the lawyer $500, give the tenant 45-60 days to move, and drop the money claim or they will file a countersuit trial demand with all kind of frivolous counter-claims, hoping to get one to stick.  They file all kinds of crazy discovery, which you have to produce.  It is pure hell.  You also have to pay your attorney for a trial.  

Be very, very careful with tenants in Chicago.  Memorize the RLTO.

I have used several of the eviction attorneys in Chicago, and I think Larry Meyer is by far the best.  312-346-0875.  Good luck!

the most important consideration when it comes to roofing work is work comp insurance.  most investors do not know this, but if you hire a company to do work at your job site, and someone is injured and does not have work comp insurance, YOU are responsible for their injuries.  this happened to an investor friend of mine in illinois.  he hired a roofing company to do a replacement, and one of the roofers fell off the roof and was permanently paralyzed.  the company he hired did not have work comp insurance, so he was sued by a personal injury lawyer representing the injured worker.  

most roofing companies (really most contracting companies) do not carry work comp because it is very expensive and adds a pretty significant cost to each job and is not required by the city to be licensed-only liability insurance is required.  

make sure you consult your atty on this to develop the best plan of action to address this reality.  

I have moved away from providing washers and dryers for tenants at an additional monthly fee because they end up putting them through a lot of abuse and I was always paying to have them repaired.  Instead, I provide the hookups and give them the name and number of a guy in Chicago who buys the broken appliances that people have companies like Sears haul away.  He reconditions them and resells them, and will fix them if they break.  The price is about half of what a new appliance would cost.  They look brand new when you buy them. I highly recommend finding a used appliance dealer vs. buying new.  

A lot of times, when people move, they do not take the appliances, so they are there for the next tenant.  In that case, I tell the tenant that they may use them, but I do not guarantee them as part of the lease.  If they break, I give them the number of my appliance guy and have them pay for the repair or buy a new one.  

i like to give tenants a choice to pay monthly, bi-weekly, or weekly.  i give them a price for each option, and the bi-weekly and weekly cost more for the convenience.  you would be surprised at how many tenants choose the bi-weekly option.  

also, i charge extra rent for pets, not a deposit.  this allows me to keep the money without having to account for extra deposit funds.  recently, i charged an extra $100 a month for a small dog.  

also, tenants frequently ask for upgrades when they are interested in a unit.  most of the time i complete them, and charge extra rent for them based on the cost of the upgrade.  

i only rent sfr's, though.  

I use larry Meyer.  312-346-0875.  He is awesome!

Good luck!