Greetings from Central FL

[Carlo Pilia]

Hi All,

I have been listening for months to every single BP podcast on my commute to work and finally have decided to introduce myself to the community. I do not pursue RE investing for financial freedom as I love my job and what I do, but I am interested in supplementing my income and net worth with active RE investing.

I live in Central Florida but work all over the state and I am always available to meet new people and discuss about common RE interests. 

Looking forward to a growing network!

Regards,

Carlo Pilia

[Thomas Franklin]

Carlo Pilia and Joshua Lyon I have a different viewpoint, from John Rogers

Regarding REIAs, I would careful of REIAs. Many of these give sales pitches, gurus try to sell their products or mentoring programs, or someone tries to get you to invest in a REI Fund by a group of people pooling their money, for some REI and promising an unrealistic return. I am sure there are good REIAs out there. In a large city, people are cut throat and motivated, by greed. I would suggest your decision to join a REIA is similar to buying a new vehicle. You take a new vehicle for a test drive before making a decision. Why not attend several different REIA Meetings before you decide joining a particular REIA?

With respect to mortgages, many Realtors will suggest purchasing a property using a FHA Loan, to reduce your out of pocket money. If the property requires rehab, the Realtor and/ or Mortgage Broker will suggest applying, for a 203k Loan. A 203k Loan is where the purchase price and rehab costs are rolled into a single loan.

Assuming you have a respectable FICO you can buy, with a FHA Loan (3-5% down, a 30 year amortization schedule, and a residential loan rate). You live in one unit and let your tenants pay the mortgage and other property expenses. This will give you experience as both a Landlord and Property Manager. The downside is you will need to live there, for a minimum of one year (to satisfy FHA Requirements); AND because you closed personally, you will not have Asset Protection, in the form of closing in the name of a LLC. What happens if one of your tenants has a slip and fall, on your property, or something else happens to them? You are on the hook and can be personally sued, for everything you own. Some people will say, "Take out a quality Insurance Policy and you will be protected." Ambulance chasing attorneys know their way around and can legally navigate around Insurance Policies. Another downside is you loose on the advantages, of the Federal Tax Code, by not closing in the name of a LLC.

If you want to close in the name of a LLC, Mortgage Lenders will offer you Commercial Loan Terms (25-30% down, a 15-25 year amortization, and a ballon due in 5-7 years). This is what I am encountering, in the current Mortgage Industry.

If you think you will go FHA, Conventional, 203k, etc. and then Quit Claim the property, to a LLC, or a Land Trust you run the risk of the lender discovering a Title Transfer occurred and activating the "Acceleration Clause" or "Due on Sale Clause" that requires the loan to be paid in full, within 'x' number of days. These clauses are contained, in all Promissory Notes nowadays.

Many Realtors and/ or Mortgage Brokers will not tell you this information. Many, but not ALL are only focused on the commissions he/ she will earn and not focused, on your best interests. You many be asking yourself what can I do? Locate a Motivated Seller that will consider Seller Financing. You may have to put more money down (10-15%), but you can close, in a LLC, with no worries about banks. I have a lengthy Legal Opinion, from my seasoned Legal Team regarding this matter.