All Forum Posts by: Scott Swanson

Clinton,

The new law says you get to wholesale 1 deal per year. You can't assign the contracts, do double closes, put it in an LLC and sell it, etc. The law is tighter than a gnats butt stretched across a 55 gallon drum! They want you to be a licensed realtor, if you're going to do more than 1 deal per year. However, where there's a will, there's a way. Let's just say I know wholesalers who have done more than 1 deal in Illinois and are not licensed. Best of luck!

Jason,

I understand that. What I'm asking is what are you factoring in,when you're calculating your numbers? What costs?

Jason, are you factoring in financing when you're looking at COC and cap rates? Obviously with financing, the percentages will be lower. I don't know the Bloomington market, but I know in the south suburbs of Illinois and Indiana, we're able to easily meet those numbers.

Boris, 

Most of my investors use an LLC. Eudith mentioned that you can't transfer a purchased a property from your name into an LLC, without possibly triggering a due on sale clause. I'm not a lawyer, but quite a few of my new investors purchased Illinois properties in their name and then transferred them to an LLC. So far none of them have had any problems doing so. Best of luck.

Jonathan, why not hook up with a qualified realtor in your area to buy a property? Maybe even a qualified wholesaler. IMO, auction.com and those type of sites are for experienced investors. Patrick Prunty broke it down well. Many "seasoned" realtors work with other investors and know about off market properties for sale. Finding a good deal on the MLS, (listed property), right now, is very difficult. Right now the market is tighter than a gnats butt stretched across a 55 gallon drum! I would also find a REIA group near you and network with others. Networking can be an excellent way to gain knowledge about the business quickly. Best of luck.

Michael, start slow and small. Do NOT spend all of your money on one property. Keep an emergency fund. Find a REIA group near you and go to their meetings. They're usually a great place to meet other people in the business and get advice. You'll most likely to be able to network with other investors and realtors as well. As far as first starting out, I wouldn't buy something for $200k or $300k to start. Once you feel you're ready to buy, start small. Learn the ins and outs of being an investor. Get some personal experience with being a landlord. Everything looks easy when you're on the outside looking in! Best of luck to you.

Samuel, keep in mind when you buy multi family, you might have whatever.....6 bathrooms, 6 kitchens and maybe 12 to 18 bedrooms to rehab. Investors sometimes forget about those rehab costs or they don't realize the high price, that they'll need to pay for the rehab. Kitchens and baths are the most expensive rooms to rehab. At the price you're looking at and IF you buy in at least a "C" area, you're most likely going to need to rehab the units or some of them. Obviously they're all different. But it can get very expensive. However, the cash flow can be much more on a multi unit than a single family home. But keep in mind so can the expenses. You have to weight out and carefully analyze everything. I tell new investors to start small. Get your feet wet in a "lower" priced property. Then learn the business, gain some experience and then buy something "bigger." Having experience is right up there with gold! Best of luck.

Eric, be VERY careful with "redemption" periods. Many banks  require that you keep the property for "X" period of time, before you can sell it. So it's important to check the details and make sure you don't buy something that you can't sell for 2 years! Best of luck.

Debra, keep in mind that if a major problem arises concerning your tenants and/or the property or a major lawsuit, the courts can take your personal bank account and hold you accountable, if you don't have an LLC or your insurance doesn't cover it.

Every state is different, when it comes to the costs of setting up an LLC. Incfile.com shows Pennsylvania costs anywhere from $131 to a little over $400. Here's the link.

https://orders.incfile.com/for...

Incfile seems to have some of the best prices out there, but it doesn't hurt to shop around! You can also have an attorney set one up for you and it would probably run somewhere in the area of $1000 to $1800. I suppose it depends upon the state and each attorneys costs. Someone else mentioned that you can buy the property and as soon as you have an LLC set up, you can transfer the property into the LLC. That's correct. Best of luck. 

Tyler, here's some information that might help you. But it takes about 2 1/2 years in Illinois. The county has a lien against someone's property for the amount of taxes owed. The county can then sell the lien to a tax buyer, who steps in to pay the taxes to the county. Even if the property taxes are sold, the "owner" remains the property owner subject to the discussion below. The owner must “redeem,” or pay, the delinquent taxes, and penalties, plus costs, to the county clerk within 30 months of the tax sale. If they don't, the tax buyer can ask the court for a tax deed. If the tax buyer gets a tax deed, and records it with the county recorder of deeds, they become the legal owner. They can then evict the owner from their home.

Buying tax liens is risky and a long process. However, you can make large profits, IF you hit a good one. Keep in mind too, that if an owner knows he's being evicted, there's a chance they will tear the place apart, before they get evicted! I don't mean to sound negative, I'm just trying to give you some of the realities of buying tax liens. Best of luck.