All Forum Posts by: Leon D.

Timothy Riley What do you mean by, "does IL include an operating agreement?" Include it in what? You have to provide for one, the state doesn't give it to you. Could you be a little more clear/specific?

Zoran Miling I'll only attempt to answer the first question, there are others that will read this that will have great answers to the second (and the first). You can TRY to get any terms you want, doesn't mean you'll get them. It's hard enough to get a bank to loan at 4%, no way a private party would offer you that... I'd expect at least 6-7%, perhaps more. As for language, you'll need call protection (so he can't ask for the balloon payment early), and maybe language that says the terms remain the same should he sell the note to someone else (or, make it non-assumable). Also, be very clear about due dates (what happens if the "5th of the month" is a Sunday? Does it mean that you need to pay by Friday, or is Monday still considered on-time?), and penalties for being late. What about prepayment ability? No doubt others will have more ideas.

John H. I wouldn't touch this at all, and I'd only even consider it if I had a report or letter confirming the oil clean-up had been effective and the asbestos didn't pose a threat. Lenders will definitely not move on it without such a letter. And yes, there is the possibility that you could be found liable in some way for the pollution (not necessarily for causing the original spill of course, but for any subsequent problems if the oil wasn't remediated), and perhaps the asbestos as well.

Amy Skaar I've found over the years that deals are a lot like relationships: the best ones are effortless, or obviously worth the enjoyable effort. If it's a struggle to make it work, that's a sign to move on. I'm not currently an MFR landlord, but I can tell you that owning one has little resemblance to owning a rented-out condo.

Almost any injury/liability issue serious enough to be sued over, in which a jury finds you liable, could easily cost over $300k. Attorney bills, expert witness fees, damages... If you really think that $300k is so large an amount as to be almost impossible, you're not thinking hard enough.

Tou V. Do you have an idea or indication why the banks are giving you the run-around? A 25% down payment is more or less on the money, you might need 30% depending on the property (market, size, condition, etc). Regardless of the building being three units or 100, you won't get anywhere by just walking in and asking for terms. Have a package ready. For starters, a resume and personal financial statement with back-up (bank statements, tax returns, etc). Next, and most obviously, you have to have a specific property in mind and ideally have an executed LOI (purchase agreement with the usual financing contingencies even better). Banks, like courts, don't like thinking prospectively or hypothetically, they like dealing with concrete issues and problems. The bank will want to know the final purchase price, NOI, DCR, etc, and they can't know any of that if you just ask about a loan on some building you drove by and are thinking about maybe kinda looking at next week. They need rent rolls, copies of maintenance contracts and leases, tax and utility bills, historical P&Ls and everything else you would have asked for during due diligence before you made an offer or during the contract DD period. A loan is a business deal. If you want the bank's money, show them that you respect their way of doing business.

You'll have to be a lot more specific.

AFAIK, a condemnation only means that the property isn't legally habitable; you can still buy/sell it. That said, the list of violations is likely long and severe enough to make the improvements (structure) worthless, so you're really just selling the land. The amount and cost of work you'd have to do to bring the property up to code would probably not make you a wholesaler on this one.

Roughly, I'd say you're looking at about $1000 for a basic installation, all in. Figure $450 for the box itself, a few hundred more for labor, and a some extra for any misc. expenses. Expect more (maybe much more) if anything complicated comes up, or they discover a problem.

Being a Virginia native now living in Chicago, can certainly see why people would want to leave Illinois. This state (and its largest city) are pretty screwed up.