All Forum Posts by: Bob Malecki

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In Pennsylvania, you can have up to three residential mortgage notes before it triggers a licensing requirement.

Thanks Evan! 

Of course Texas as well, although finding a well priced note in Texas can be challenging. 

Yes, a QCD would work best. I buy in my name for bank financing then QCD to my LLC for liability protection

Also, realize that real estate investing is more than just owning the building. I was able to flip a 4 Plex in Tacoma last year by acquiring the distressed second position debt then taking ownership and selling the property at a good profit in less than 6 months. "Being the bank" is always a great way to have recurring cash flow without tenants trash and toilets, and I found that it provides great control over the direction and liquidation of a property when needed!

Bob

I had a very good experience with Spinnaker in Tacoma with my 4-plex

Spot-on Jamie. In my world, a joint venture is essentially a structured partnership between two investors - myself and my counterparty. I use a JV / partnership agreement that clearly defines each partner's roles and the variables that can happen for the outcomes such as the death of a partner insolvency, etc.

if you have a JV that involves more than two parties, then your muddling more so into securities and raising capital.

Dave, I think that exploring the legality of a joint venture is futile, since they happened every day across various sectors in our economy and worldwide for that matter. The more important component is how the JV is structured and if it is compliant with both state and federal securities regulations. A simple partnership should fly pretty much in any state and on a federal level.

Also consider that none of this matters if the project goes well and everyone has their expectations met. One attorney I met called this the "good deal exemption". The importance of a solid structure and sound regulatory compliance is relative if the deal goes sideways and partners start to go down the rabbit hole of litigation. Having a defense based on a handshake or very weak contract will put the sponsor and the investor at risk.

Just for the record here, I am not an attorney and only speaking from my experience and exposure to various operations that I've been involved in. I encourage anyone reading this to consult with their own legal counsel regarding their specific deal and structure....

I agree with Chad in the respect that the legal balance has a lot to do with the characteristics of the note, the value of the property in the disposition of the borrower. I think the legal balance is a valid selling point when evaluating a note to purchase since, if enforceable it can increase your return on either a loan mod or at the foreclosure auction. 

Typically, a thorough due diligence review will reveal whether the legal balance has substantial upside to improve the value of the note and its outcome.

You might also want to check out DirectedIRA.com one of the principles is Matt Sorensen who is one of the foremost authorities on self-directed IRAs especially in the realm of real estate investing. I found that their fees are very reasonable. 

Realize that many custodians will charge a fee for every asset you invest in as well as an annual fee. Companies like Quest and Directed IRA will have just an annual fee and not charge for every time you want to do an investment into an area like equities or precious metals.

Personally, I set up a LLC which has my self-directed IRA as the sole member and that LLC can invest in pretty much any asset class that I wanted to. another advantage is that I do not have to request funds from my custodian for every investment that I want myself directed ira to make.