All Forum Posts by: Ari Bachrach

I've used them in the past. They're one of the largest wholesalers in the DMV area, but other than that nothing special about them. The biggest problem I had was the title company they used - clothesline title. Clothesline is known as a terribly shoddy titles company. One of the title attorneys I work with regularly said he's seen significantly more mistakes by clothesline than any other title company, some of which have prevented people from being able to resell or refinance their house. (They also screwed up something on our purchase, but luckily it was fixable when we went to sell it). Feel free to use MarketPro, but try to use another title co.

I'm closing on a house next week that happens to be in an opportunity zone. I will be doing substantial work on the house - my rehab budget is larger than the cost of the house. I also have lots of unrealized capital gains in the stock market at the moment, so I'm trying to figure out how to take advantage of the OZ. I was planning on closing in my personal name so I could get a Fannie/Freddie loan when I go to refi in a few months. Everything I see on OZs talks about investing in a fund, however I don't want to invest in a fund - I want to invest directly in the property. So two questions:

1 - Can I buy the house as an individual using my using capital gains and defer the taxes, or must I create a QOF to purchase the house?

2 - If the answer to #1 is that I must create a QOF, then what's the simplest way to go about this? Since the QOF must file IRS form 8996 I assume it must file its own tax returns, so a disregarded entity like a single member llc will not be good enough. Do I need to create a C or S corp? What's the easiest way to do this given that I'll be using all my own money?

3 - Given that the answer to #2 is probably still somewhat complicated and time consuming, are there firms or individuals popping up yet who will do it all for me? (including filing the IRS forms, etc.)? 

I don't know if things in NJ are different, but in my area most of the 55+ communities do not allow rentals. You might want to look into that first. I would find a realtor who is listing some properties in those communities and ask them as the listing agent should know the rules.

@Scott Smith I'm very intrigued by the idea of using land trusts. I've spent a few hours reading a lot of your posts and other material online and I still have a few questions.

1 - Who is the trustee of the land trust?

2 - In the article you linked to step 3 is "simply deed the property to your LLC". I though the point of this was to keep ownership in the trust. Shouldn't we just make the llc the beneficiary?

3 - When using a land trust, some other entity still has to be managing the property and collecting rent. (The land trust, as I understand it, can't own a bank account). How is this structured legally? Also, doesn't this pierce the veil of privacy? My tenants will still know that I'm the one who calls them when they're late on their rent. 

4 - More generally, there are times when I need to prove my ownership of a property. For example I had squatters in one a few months back, and the first thing the police asked me was for proof that I owned the property. How would that work?

TIA

@Wayne Brooks I was under the impression that the change made 2-3 years ago was that buying in a single member llc counts for seasoning so you don't have to wait an extra six months after moving a property to your personal name to do a refi. Can you point me in the direction of the policy or guidance you're referring to?

@Wayne Brooks

Can you elaborate on #2? I was under the impression this was not possible.

Because asset protection is a high priority for me I've kept everything I've done until now in an llc. However I've been thinking about financing, and the very cheap and long term fannie/freddie loans are enticing. To get them though, it seems I have to keep the property in my personal name. If I do this, what are some other asset protection strategies I can employ to limit my personal legal liability?

As others have already said when it comes to PML it's in your best interest to find out what the potential lender wants. That being said the most common thing I've seen is to use the PML like a hard money loan - short term loan with a higher fixed interest rate. When you stabilize the property and do a refi, that's what the PML gets their principle back.

I'm sure I'm not the only person here who uses houzz, so I wanted to give everyone a heads up that houzz suffered a data breach and had had usernames and hashed password stolen. If you use houzz, you should consider your password compromised and change it. Additionally, if you reuse passwords (and who doesn't?) You should change it on other sites as well. 

If you want to really be secure, use a password manager like lastpass, keypass, sticky password, or logmeonce to maintain unique passwords for each website you use. That way if something insignificant is hacked like houzz, it doesn't compromise your credit card or email account.

That's interesting. This previous thread seems to say otherwise. I guess I'll have to check with a CPA.