All Forum Posts by: Brittany P.

Quote from @Russell Brazil:

Quote from @Brittany P.:

Chris, your insight is always appreciated. Our basic understanding is that it's best to put the deed in the LLC's name in case a tenant stubs their toe and tries to litigate. In the event we're found liable and there's some significant judgment against us, isn't it more beneficial to have the liability limited to the LLC as opposed to all our personal/business assets if the property were in our name? Interested to hear your thoughts...

Do you also plan on getting a commercial insurance policy? Is the property owned outright, or do you have a loan on it? If you have a loan will you be refinancing it to a commercial loan with the LLC as the borrower?

If you don't change the insurance, the new owner of the property would be uninsured altogether.

If the loan is in your name, and the the property is owned by an LLC, then that LLC offers no protection as the comingling pierces the corporate veil.

Wow, was unaware that keeping the mortgage in our names pierces the veil. Looks like this effort is moot until rates come down and we can refi. Thanks!

Chris, your insight is always appreciated. Our basic understanding is that it's best to put the deed in the LLC's name in case a tenant stubs their toe and tries to litigate. In the event we're found liable and there's some significant judgment against us, isn't it more beneficial to have the liability limited to the LLC as opposed to all our personal/business assets if the property were in our name? Interested to hear your thoughts...

Calling all MD/Baltimore real estate/title pros: we are trying to deed two Baltimore City, MD rentals from our names into our LLC's name. The city has explained that since this is a "no-consideration" transfer, it's not subject to transfer tax. However, apparently the deeds need to contain the relevant exemption code in order to avoid the tax. The city won't provide the transfer code to me, though. Does anyone out there know what the code would be for a personal-to-LLC transfer? Thanks!

Thanks, Chris. Makes perfect sense.

Another question for you pros: we currently manage a small portfolio of CFDs on land parcels and a couple of private loans. We service everything ourselves (because we're cheap right now--please don't judge us too harshly). Is there an issue with getting set up with one or more of the credit bureaus and starting to report on our borrowers? Is anyone aware of legal issues with this? Especially considering that the seller we bought the CFDs from did not report on the borrowers. Are there restrictions on credit reporting for CFDs versus mortgages/DOTs. If there aren't issues with this and it wouldn't be too much extra work, I'm really just looking for an additional tool to incentivize our borrowers/purchasers to keep paying timely each month. Hoping the experts can chime in here--thanks, all!

Are you saying the debt can be wiped out if you aren’t sending statements?

Thanks, Chris—super helpful!

Thanks! Do the rest of those states allow non-licensed lending on owner-occupied? Or maybe an easier way to ask: are there states that allow non-licensed lending on owner-occupied/primary residences?

Quote from @Beth Johnson:

I rarely, if ever, go behind HML for the reasons stated by others. There is too punitive measures and shorter time horizon for that loan to mature and eat away at your equity buffer. In WA state, we are deed of trust state and non-judicial (with an option for judicial) and requires a Notice of Default (30-day cure period) and a 120-day Notice of Trustee Sale with cure period. I'm extremely careful about how we originate 2nds and it's not for novice lenders and it certainly is not something I would buy - even at a steep discount. Yes, I've had to foreclose on a few in 2nd and it wasn't a problem because I was behind a conventional mortgage lender who could not act as fast as we could. But plenty could have gone wrong if it were not managed tightly - both during origination and while the loan was in service. There are some states like TX where the foreclosure process is so efficient, you could lose your equity position within 30-days of the borrower defaulting on the first. So, that's a state where we would be super cautious about lending in second position.

And to @Jay Hinrichs's point, I see no safeguards for gators when teaching about gap funding, EMD funding, or any other tactic that they try and sell which tells you to get 0% interest credit cards and build business credit to be used to lend out. No thank you. I'll pass.

Very rookie question for you, @Patrick Roberts and everyone else here: I thought that post-Dodd-Frank, the barrier for mortgage lender accreditation/licensing was essentially raised to a point that HML’s and private lenders were effectively iced out of securing loans with a mortgage or DOT. I guess I had (naively?) assumed that hard/private money loans were either unsecured or collateralized against non-real estate. Is that not the case? Is it possible to get licensed as a hard/private lender and secure loans with a mortgage/DOT? Do hard/private lenders have to get licensed by NMLS? I thought this day and age all lenders had to be individually licensed and working for a brokerage…?

I figured I’ll get to that point eventually, once my portfolio hopefully grows a little larger. It’s just that for performing CFDs they’re so easy to self-service, at least for now.