All Forum Posts by: Aaron Mikottis

Don’t listen to these naysayers telling you to get out of the business. You’ve been pushed around, yes, but you still hold some leverage. There is still hope but you need to do some emergency damage control right now. It sounds like you don’t enjoy being Mr. Mean Landlord. I empathize. An easy solution is to create a scapegoat to be the bad guy for you.

Step 1: Call your lawyer right now and find out how to begin the eviction process in your state. Have a quick conversation about the situation.

Step 2: Tell your tenants that you have just been informed by your lawyer that according to state law, you are not allowed to use the security deposit to cover rent. As such, they are behind and they have no choice but to pay you for last month’s rent. Tell them that your lawyer is seeing red and is demanding that you evict them RIGHT NOW and is recommending to sue for every tiny issue that may be wrong with the property. However, because you know what honest and respectable tenants they have been, you have told your lawyer that you are certain that none of this trouble for them will be necessary. You know that they will pay their rent on time and you won’t need to damage their credit. You also know for certain that they will receive their full two months security deposit back once they move out because they are going to leave the property in great condition. Play their own good faith against them.

Step 3: Follow through on the threats. Tell them that although you know that it is unnecessary, the lawyer is insisting on sending the quit or pay notice. If it is considered legal notice in your state to send it via email, include it as an attachment in your message to them. If not, hire a courier and have it delivered, or do whatever it takes to put your foot down ASAP.

I doubt that the tenants are ready to move out tomorrow. Let us know how it goes.

All,

Thank you for your honest replies. To answer the question on how much equity would be traded, right now the discussion is talking about a 1-to-1 exchange. $20k investment in the company is worth $20k. Growth gets captured by us both.

Anyone do something similar?

@Jay Hinrichs - Thanks for your comment about minor partners. I appreciate the info on the loans as well, I did not know that!

@Bob Derwin - I have known this person for a long time - we used to live together. I agree that it is a lot of hassle for not a lot of cash right now. I believe that he is "testing the waters" so to speak. He's a strong index funder so this is outside his comfort zone. I believe that he wants me to have skin in the game until more trust is developed.

@Tom Spaeth  - thanks you for the comment. If I move forward on this I will definitely not have all of my properties in one basket.

@Andrew Johnson  - I appreciate your perspective. In my eyes, $20k could pay for a rehab, allowing me to jump on a deal I might not be able to fund. My portfolio is still small. More money = more moves. But I agree that $20k is not an enormous sum and I will still need to strap together more funds from other sources.

@Jeff B.  - Great point! I will have to structure this in a way that retains my majority share in all scenarios.

@Jeff Filali  - good point on finding a $20k loan cheaper!

Hi BP. I've got a potential equity partner who is interested in buying a stake in my LLC instead of buying into individual deals. It would be something like a $20,000 starter investment and then an additional $20k contributed each year. I can use these funds to pay for property acquisition, marketing, rehabs, or anything else needed to keep the company growing.

Is this a dream come true or an accounting nightmare? Has anyone structured something similar? Any pitfalls to watch out for?

I would love to see a Joliet area networking event happen as well. I just started a yellow letter campaign and the opportunity to network with locals investors would be tremendous. I am on the hunt for partners, cash buyers, mentors, and mentees. I am a small fish but I'm always happy to share what I have learned about the Joliet market.

Ray, I'm starting a yellow letter campaign later this month. I'll send you a message to talk about what you're specifically looking for.

Another one down! Sounds like some great numbers on the property - congrats!

What do you think that the ARV is... potential to BRRR here?

EDIT: saw you answered the ARV question already in the thread.

I would love to go but unfortunately, I've got a massive work deadline and can't take any time off. I'll keep my eyes peeled for future events.

Good read, thanks for posting. Let's not forget about Amazon moving into the midwest market, too. Funny they would mention IKEA's distribution centers over Amazon's.

Have you reached out to Wendell de Guzeman? His investment company operates in the Chicagoland area and he provides HML and gap funding. He's a user here and was on the podcast - #65 I believe.

1) Right now the Joliet market is reasonably hot. Actual good deals aren't that easy to come by. 

2) Taxes in Joliet are relatively high, but you should be able to take the public tax records and plug them into your numbers. 

3) Couldn't tell you

4) Very low. I rented out my duplex in a week. Very high pressure on the inventory as a large public housing project is getting broken up.

5) I'd say so but look to others for hard numbers.

6) Extremely

7) Haven't had to deal with an eviction myself, but I've heard that Will is landlord friendly. 

All good questions. I think that Joliet is a great place to be with their job and population growth. Take a look at news articles to see what I mean about jobs coming in.