All Forum Posts by: Eric Wallace

I just read "Loopholes of Real Estate" by Garret Sutton which is part of the "Rich Dad Poor Dad" Series. I am not quoting word for word and may very well not convey what is in the book accurately but I highly recommend reading it. In his book he covers LLC and asset protection along with tax strategies. There are a few things he writes about that have not been covered in this forum post and he also speaks to how LLC's vary in cost from state to state. Like someone said earlier California LLC's cost $800 while Michigan LLC's cost $50. He also writes about how some states laws offer stronger LLC protection than others. He writes that a LLC in Wyoming that is sued and loses can only have a charging order against the property and not get the property itself. What this means if I understood correctly is that since most lawyers work on contingency if they see a property is owned by a Wyoming LLC they are less likely to take a case because even if they win it will be hard to collect. Furthermore he writes that an LLC that holds a property in Georgia can itself be held by an LLC located in Wyoming and enjoy the Wyoming protections. (Again I stress this is my understanding of what I read). IF you spend $400 a year on an umbrella policy it seems to me that another $100 to hold your property in an LLC might be worth the effort.

Either way I highly recommend this book to anyone who is on the fence about the need for an LLC. I only have a few properties and have not formed an LLC but am leaning toward do so this year.

I have also recently found information about a Series LLC in Illinois that greatly reduces the cost of multiple LLC's while affording multiple LLC protection. If there are any lawyers on the site from IL that might have insight on this form of LLC I would love hear from you on the benefits or drawbacks of this type of entity.

 Thank you all for the feedback.   Bill Neves,  it is a double wide with a peaked roof and shingles.   I will budget a tear off  with new shingles.  Thanks again for the info.

I have no experience owning a mfg home.  It is a 3BD, 2BA home with about 1300sqft, a detached garage on an owned lot so no lot fees.  Structurally the home seems sound and looks like mostly cosmetic work needed.  My main concerns are these:

1. The ceiling has some water spots but noting looks recent.  The roof is old and likely needs to be replaced.  The problem is that there is no way to get into the "attic" space.  Suggestions?

2. Nearly every ceiling in the home droops a little.  They all seem solid and I think at some point someone has floated in a second layer of covering.   

3. How will a bank appraise it once it is fixed back up?   I have looked for comps but they range from 8k up to 50k so it's hard for me to guess what the place would be worth once fixed.

I've bought homes "as is" before so I know from that standpoint to assume the worst and hope for the best but I am mostly just unfamiliar with Mobile Homes and how to assess what I am seeing.  

Appreciate any input from experienced owners. 

Thank you!

While researching properties on the county assessor tax websites I often come across properties that have sold in very short periods of time for substantial differences and it appears the buyer is often a trust and the seller may be the owner of the trust.   Example: I recently came across a property that was purchased on 6/13/13 for $75,516 then sold on 6/26/13 for $29,300 then sold again to a trust on 7/16/13 for $42,700.  Is what I am seeing some sort of strategy for pulling income or tax benefits?   Just curious if anyone has an idea.    

Zach,   Thanks for the post.  Are you a direct lender to Fannie or Freddie?

Thank you all for the feedback. I have been told basically this a few times by various lenders but thought it would be worth a shot to check with the community here. I did not know about the taxable event that it would create to move the properties out of the S corp.

Thank you!

I am 25% owner in an S Corp with my brothers. We have 3 properties, (one is a duplex) the others are single family. Two are financed through a local bank via 7 year balloon commercial mortgage each at about 5-6% APR, with payments amortized to 30 years. These loans are coming due soon and we are wondering what folks here would suggest our best options to be for refi. One of the loans is on the duplex that is worth about 200-225k and we owe about 170k and the other loan is on one of the single family homes that is worth about 80k and we owe about 60k. One final caveat is that we own the third home free and clear but it would only appraise for about $25 to 30k.

Is there any way to work things so that we could secure 30 year mortgages on these properties and keep them under our S Corp umbrella? Should we consider other options?