All Forum Posts by: James Vann

I recently heard an asset protection attorney say to use a Warranty Deed for these types of transactions. It wasn't entirely clear why... but from what I gathered, the theory was that it was better for demonstrating a separation of concerns between you and the LLC, and part of a broader strategy to prevent piercing the veil. I have no idea if there is any case law to support this theory, but good lawyers often throw every possible protection strategy out there just in case. Since a Warranty Deed is unlikely to be a negative in any way, it is probably a good idea to just do what your attorney is recommending- and if you still have questions- ask your attorney. Your lawyer should also be telling you all about the other things you need to do that are probably much more important to protect your limited liability.

If you are really concerned, consult with a competent attorney.  The answer will depend slightly on your state, anyway.  In general, providing a personal guarantee alone would not be enough to pierce the veil and expose you to liability outside of the loan guarantee itself.  

However... it is possible that an opposing attorney may attempt to argue it was part of a pattern of co-mingling finances. So you will want to be very careful not to do anything that would support such a pattern or argument. If you aren't absolutely certain how to separate your concerns and make it clear when you are acting on behalf of yourself or the LLC, preventing piercing of the veil, consult a good attorney in your jurisdiction about it.

Others have posted some great advice as well.

In theory, the information registered with Fincen is supposed to be private... but we all know the government is incompetent at protecting personal information, and it is bound to be leaked all over the place.

I'm not sure,  it may make a difference where you live.  In most places, they would both be listed as tenants, on the same lease.  Terminating the single lease means it is terminated for both of them.  You may want to run it by your attorney, because different jurisdictions may have different rules, though.

It may depend a little on the state.  If they are on the same lease, they are usually jointly responsible for the lease.  If one of them terminates the lease, they both have to.  (Then it would be up to you to re-evaluate if you want to lease to her solely (if she want to stay)- at that point, you would look at her income solely, which may have changed.)

Edit:  I just noticed you are form CA, if you are leasing in CA, I am told they have very tenet friendly laws...  you may want to have an attorney advise you and review your lease.

Oh, no, maybe you are from Seattle... I saw the the poster and mixed you guys up!  Either way, if you are band new, you may want an attourney to review your lease and advise you about laws specific to your area.

As Linda pointed out, their marital status has nothing to do with it.  Every adult, married, not, child (18+), uncle, grandma, etc,  goes through the same process, background and credit check.  Every adult living in the unit must be put on the lease.  You lease should require that any adult living in the unit be on the lease.

Yes, the fact that they didn't contact you in advance to discuss the increase and simply did what they wanted to is enough reason to fire them.  I would even discuss with my lawyer about holding them accountable for the lost revenue.  May depend a bit on what is in your contract with the property manager.  

If you are doing business in another state, you are (usually) supposed to register in that state as a foreign company.  But yes, you can do it.  Just make sure you a fmailiar with the pertinent laws in the states you are operating in!

Hi Steve!  Thanks for your input- I included 8% of the rent as a management expense, do you think that is generally in line with what I should be doing for property management?

I did run the property through the Bigger Pockets Calculator to get  a good idea of how it works and see if it had anything I missed, but i wanted to have my own spreadsheet to customize and share too.  I am a software systems engineer by profession, so writing my own calculator seems like the obvious thing to do :)  (Of course, seeing how others have done it can help me keep from making mistakes and it is free, so I did use it to double check!)

And yes, I did figure on my own 'rent' as an expense... though it isn't reflected in this calculation, we haven't yet decided if we are going to live in the 3 bedroom or one of the 1 bedroom units yet :)

Thanks again for taking a look!

Hi guys,

I've been following Bigger Pockets for a few years now, and I am finally in a situation to start investing!

Here is the situation- my wife is going to be attending school finishing her bachelors degree in the fall.  The University she will be attending is about 100 miles from out home :(  Lucky for me, I have a good job now that lets me work from home!  So we will be moving for the next 2 years.  We want to buy a small multifamily property, fix it up, live in one of the other units and rent the others.

I have found Triplex that I think will fit the bill.  It has potential, and the seller is out of state and wants to get sell bad.   Seller is willing to do owner financing.  I have the cash saved up to make this deal work, I will be doing much of the work myself, but estimated expenses as if I was contracting it out.

So... here it is:

https://docs.google.com/spreadsheets/d/1pC_u4uiDaM...

I would love to have you more experienced folks tear it apart for me!