I have apartment buildings that will possibly be foreclosed on. What happens in a foreclosure in IL?

The mortgage is $3,000,000. I have been offered a short sale of 1,500,000. If the bank does not accept this short sale, what is the procedure on a foreclosure on apartment buildings. Who gets the rent? Who pays the utilities? Who maintains the buildings? What happens to all the tenants (56 units involved)?

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2 Responses to “I have apartment buildings that will possibly be foreclosed on. What happens in a foreclosure in IL?”

mikesdaman71 Says:
July 28th, 2009 at 11:15 pm
excluya los medios que será la característica de los bancos. En cuanto a los arrendatarios es su responsabilidad informarles. Llame a un abogado que puede ser que puedan ayudar. Mejore con todo un agente inmobiliario pudo ser provechoso también.
dave c Says:
July 29th, 2009 at 1:36 am
Lets start with the time line before they take building probably looking at 9 to 12 months depending on the type of judicial foreclosure they go after. The tenants stay and you might try to continue to earn income off the building while u manage it as they take it back. I have seen investors sock away over 100k in pure cash on deals like this while foreclosures happens and they make no payments and collect tons of rents. Is it right maybe not but who cares as long as you take care of the tenants and fix things as needed so there living doesn’t change.
Do not accept a short sale it could cause you a 1.5 million dollar tax liability if the bank sends you a 1099 for the forgiven amount of debt they have a paper lose on regarding your mortgage. you see the difference between what u owe bank and what the short sale is can be a tax liability to you. This is Cpa type area that you must be very careful about. Call a Cpa and discuss it briefly before you do anything you will regret later.
The tenants future is up to you if you go on collecting rents during this time phase of foreclosure you will have plenty of cash to take care of tenants and keep them happy. The buyer of building from bank after they take it back will be an investor as well so they will take over management and there shouldn’t be too many problems. If banks cant handle management usually HUD steps in and auctions it off for the banks. So this isn’t a big deal for tenants cause during the last year of your ownership its up to you to care for them. Just remember if you collect the rents take care of tenants first and pay other bills second and of course don’t pay mortgage cause bank will have property soon any ways why give them extra. Yes people maybe upset you are collecting money and not paying bankster but who cares those bums print money from thin air so why should any one feel guilty about a small business owner taking a few bucks off an asset before it goes back to the banksters. In the future be smart the borrower is servent to the lender. Pay cash for assets like me and you get rich easier. If you cannot afford a 3 mil property then buy a 50k house and get your 700 a month income off it with no pmts! lower returns maybe but you are safe from foreclosure this way and debt free.