All Forum Posts by: Harry Gamble

@Brian G. The loan documents will govern. I would read your loan documents and get a feel for your legal position in the matter, then communicate with the lender. If the property is the security for the loan and there is a shortage, the LLC may very well be liable, and well as you two personally up to the full amount of the shortage for either of you, assuming liability is joint and several. But then again the loan documents govern. That being said there may be some practical reasons the lender would not pursue the difference.

Disclaimer: While I’m an attorney licensed to practice in AL, I’m not your attorney. This reply does not create an attorney/client relationship between us. My post was written for informational purposes only. Do not rely on it as legal advice. Always consult with an attorney in your state involving any matter appearing in this forum relating to legal issues

I am considering making a private loan to help someone with a flip.  I am not taking a security interest in the home to be flipped for several reasons.  The flipper has offered a second mortgage on his home.  Based on what he tells me, he has plenty of equity in the home and is current on his first, but I have not verified this yet.  I have dealt with the potential borrower on other deals with no problems.  To cover myself I will require a copy of his first mortgage to see if there is a future advance clause, if so I won't make the deal. I will also require a statement from the first mortgage holder confirming the balance as well as confirming the loan is current.  I can get a reasonable feel for the value of the house and determine that sufficient equity is there.  The plan is that his flip will pay off the loan, but I will only make the loan unless the home second mortgage secures the loan sufficient to get repaid in full along with foreclosure costs in the event I had to foreclose.  What am I missing?  Should I require a title report to make sure there is nothing else that would take priority over my second mortgage?  I guess he could have a judgment or something on record since the first mortgage loan was made that would affect my priority.   

@Lei L. I did see a study once that interviewed former thieves about how they decided which house to rob, and having a dog was at the top of the list of deterrences.

An alarm system is an option, although you will likely be locked in to a contract. If assignable, you could assign the contract to an incoming tenant, but will still probably be liable as a guarantor if the assignee defaults. One would need the alarm company to fully release the assignor from this liability upon assignment-possible, but unlikely. Alternatively, you could continue to pay the security system yourself and include it as a perk for the tenant. This is of course if you are going to rent rather than flip.

I once bought a house that needed rehab, including all new central air, and I installed an alarm system inside and a steel cage on the new outdoor air unit. The next time I went to the house, the outdoor air unit was gone. Someone had got a vehicle into the back yard and ripped the cage, with the concrete, out of the ground. The culprit? My lovely neighbor.

I like alarm systems, motion lights, indoor timer lights, maybe a radio playing in the house, and the above suggestion of dog barking alarms.

I would be interested as well.  Also, Samuel, the Birmingham AIA real estate investors association has started a new presence in Baldwin County and I believe there is a meeting Sept 28th.  I can let you know if you'd like.  AIA website is aiaclub.com.  They are very strong in Birmingham and hopefully the Baldwin chapter will be as good. 

If you and/or your neighbor has an accurate survey, you can determine where the fence is in relation to the true property line, and you can see if it’s more on one side or another. Most of the surveys I see show at least some fence encroachment- I don’t see many where the fence is spot on on the line. If it’s way off, there may be an adverse possession issue, which could be in favor of either party. I don’t know how long the fence is and how much it would cost to build a new one..hopefully you get the matter resolved another way. I had a tenant neighbor who had pit bulls that were getting through the fence (chain link) and killing the tenants dogs. The neighbors were impossible to talk to, the city couldn’t or wouldn’t take action, and we ended up building another fence on our side of the chain link fence, a six foot wood privacy fence, and that solved the problem. Didn’t re-fence the other two sides of the backyard. There are various types of fences designed to help address intrusion problems, like an L-footer, hard plastic, and other redundant fences. Disclaimer: While I’m an attorney licensed to practice in AL, I’m not your attorney. This reply does not create an attorney/client relationship between us. My post was written for informational purposes only. Do not rely on it as legal advice. Always consult with an attorney in your state involving any matter appearing in this forum relating to legal issues.

I also would consider that oftentimes the last lot or two in a new subdivision is the least desirable, for any number of reasons.

The deed is given to the buyer in an owner finance situation in Alabama, and a default requires foreclosure.  One may be able to keep the deed and evict upon default under a lease purchase contract, and evection is faster and cheaper than foreclosure. However, these contracts are tricky because,  depending on the nature of the contract, courts may interpret it as a sale and require foreclosure instead of evection.

You'll need: 1) Articles of Organization, which as has been said, can be done yourself through your SOS. 2) Operating Agreement. This is not as essential with a one owner LLC, and many people don't have one. However, I would do one, for the purpose of documenting in case someone were to try to "pierce the corporate veil." 3) Use IRS SS-4 EIN application to get a Federal tax ID number. 4) File any state tax forms that your state may have applicable to business entities, with a check for any tax imposed. Disclaimer: While I’m an attorney licensed to practice in AL, I’m not your attorney. This reply does not create an attorney/client relationship between us. My post was written for informational purposes only. Do not rely on it as legal advice. Always consult with an attorney in your state involving any matter appearing in this forum relating to legal issues.

Being consistent in dealing with all applicants helps protect from exposure to a discrimination lawsuit. If you change your ad bc of market conditions (document this), and it's clear you are not discriminating, you should not have liability exposure. That's not to say someone couldn't file suit against you with a meritless claim. If you rejected an applicant who is in a protected class bc they had a dog in a no dogs advertisement (print and keep old ad), then changed the ad to allow dogs and rented to someone not in a protected class, the rejected applicant could conceivably feel that there was an actionable discrimination. The person could wonder why you didn't call them back when you decided to allow dogs if that was the only reason given for rejection. But I don't think you have liability exposure where you can prove your intent in changing the ad and have documentation, based on what you have stated. Depending on the details, it could help to connect with any rejected applicant who qualifies under the new ad, where the reason for rejection was solely based on the pet prohibition. I assume that if it makes sense to contact any previously rejected tenant to inform them of the policy change, you've already considered this option. Disclaimer: While I’m an attorney licensed to practice in AL, I’m not your attorney. This reply does not create an attorney/client relationship between us. My post was written for informational purposes only. Do not rely on it as legal advice. Always consult with an attorney in your state involving any matter appearing in this forum relating to legal issues.

In some jurisdictions, a defendant who cannot be found, or refuses service of process, can, after proof to the judge of this, be "served" by a publication notice (newspaper notice). However, publication notices can be fairly expensive and may make your case cost prohibitive, depending on how much is owed. Also need to factor the likelihood of collecting on a judgment. Disclaimer: While I’m an attorney licensed to practice in AL, I’m not your attorney, and this reply does not create an attorney/client relationship between us. My post was written for informational purposes only. Do not rely on it as legal advice. Always consult with an attorney in your state involving any matter appearing in this forum relating to legal issues.