All Forum Posts by: Dion DePaoli

Georgia does have some law around the concept. Instead of being responsible for drawing up something you are not familiar with why don't you explore outlining the terms and parameters of the finance structure and get an attorney involved to ensure it is done correctly?

For the most part the suit can be made against the LLC. In some situations the suit may be able to pierce the veil and go after the shareholders or owners. You can setup a new LLC for each asset but that is likely overkill, perhaps on large or troublesome transactions.

Your question really is not specific enough to answer better than that. What do you think you will get sued for? Is it not covered via the transaction paperwork? You may want to sit with a local attorney and see if you can cover your concerns. For practicality, you should be able to make it all work with one LLC.

You should be able to use your preferred title company too, just have your agents call the agents from the other company. There is no reason they should not be able to work together, they may even have the same underwriter. I would recommend this, fire drill deals with forced use of vendor services is a recipe for problems.

For all intents and purposes, there should be very little "mark ups" on the commitment. Presumably, the only thing missing would be the last owner. The title insurance company is going to require this to be properly recorded and is likely a stipulation on the commitment.

A marked up commitment is really just notes written on the commitment relative to the exceptions and stipulations. All items still have to be done correctly, deeds recorded, clouds cleared, etc.

I would get someone you know who knows how to read the title abstract involved either as a title agent or just as consult. Get a copy of document from the title company and share with your associate. Assuming the seller has clear title, there should be very little mark ups it could be just jargon confusion opposed o something shady. You have a right to have someone look over the commitment.

In California the security instrument is a Deed of Trust that gets recorded which is separate from a promissory note. It is recorded in the subject property county via the clerk's office. Typically the seller/owner would file this instrument to ensure his security in the property is of record and would receive a stamped copy back. The borrower/buyer usually only gets a signed copy at closing.

It might be important to ensure this is a seller held mortgage and not a contract for deed or some other form of finance as that can be a bit different.

Promissory Notes do not get recorded. Consider the note an IOU and consider the DOT the pledge of collateral. When a note is not recorded it is considered "unsecured".

The purchase and sale contract is its own document separate from the note and mortgage/dot (each their own document). There is some regulation the seller/financier will have to be mindful of and you all should really have an attorney involved. Not doing this correctly or having a properly formed security instrument and note can be costly to all parties in the long run.

If you have not closed you could ask for the seller to contribute toward closing costs. You will be limited to a max of 3.0% I believe because it is an non-owner occupied property. You will need to get the approval from the seller by getting it written up and alert you lender/broker to the same so they can update underwriting. You might be able to review some of the fees charged by your broker and lender to see about a reduction. At rough glance you seem like you got a pretty decent deal. Outside of that "no" there is no other way to reduce what you have to pay at closing.

With that much equity in the property I don't personally believe the hard money lender will sell their note at a discount, they really don't need to. Albeit, you did not mention what chapter the BK is and what time they have left on their term.

It might be wise for them to look at trying to refinance before filing their bankruptcy, they have some equity which might help make up for the presumed bad credit. Also filing for BK will at the least put the hard money lender on notice which they may or may not respond nicely to.

Selling it and buying it back is not the right choice here since they have equity and they are about to file BK which will affect any new financing they need to buy it back. The purchase of 65K is still considered 100% even though the property's value is more than the purchase price, they will end up loosing their most valuable quality which is the current 35k of equity.

Sam I am not sure about any course or great material but I would recommend that you actually read the mortgage or deed of trust and the note which you are purchasing. If you are purchasing with the intent to foreclose because you want to get the deed and own the property then reading up on the foreclosure laws in your state and procedures in your county will be helpful.

If you have some more specific questions perhaps you can get some insight to educational topics from posting your questions.

It sounds a bit like you knew your answer. You didn't want to co-mingle the liability of the commercial asset with the residential assets you have. That is logical.

You can setup an LLC in any state in accordance with their laws, it does not "have" to be in the subject property state. All that is up to you. Having the liability bubble around an apartment complex legally is smart in case someone sues you. Additionally, go talk to your accountant so you understand what your best tax structure is. You could structure the multiple LLC's you now own in a couple different ways and you want that benefit to be maximized.

Doesn't really sound like you have a fantastic client. They want major MSA's. They don't want to compete with the market, a.k.a. they want to see if they can't get a discount or its not "their" money.

The irony of any asset listed for sale is it is actually "for sale" opposed to looking for a ghost.

I would go back to your investors and get to the bottom of what they are really up to before you waste your time. Get details on what they want and look for some added value. Perhaps if they have some niche it might benefit you to call on some REITs or Funds but if is they just want the a great property in a great market with good cash...get in line, it's a long wait.

When you contacted the painter....it sounds like you contacted him and then purchased the property at sheriff sale. So at the time you inquired about his service technically you could not offer him the job as you didn't own the property.

Either way, there is no harm done to him and I don't think he has anything to do to retaliate.