All Forum Posts by: Jeff Copeland

Why not look for the best of both worlds: A local builder with a good track record?

As already mentioned, familiarity with the local municipality's permitting and inspection processes can go a loooonng way towards keeping your project on track. 

Some conventional lenders will go to 80% (versus the usual 75%) on an investment property cash out refi. Just find a good mortgage broker like to shop available loan products for you. 

However, the higher LTV usually comes with higher rates and points, so you really have to crunch the numbers on how much of that extra 5% gets eaten up by origination costs and interest before you ever see it.

Neither of these things should come as a surprise. Conventional loans (which generally offer the best rates and terms) are not generally available to LLCs. They are for individuals. But in most cases, you can just transfer the title into your own name. at the same time you close on the refi. 

And you can't really implement the BRRRR Method with a rate/term refi.

Cash out will generally be a point higher than rate/term, and investment property will generally be a point higher that owner-occupied. 

I think your situation is just a case of "it is what it is".

That being said, you could certainly crunch the numbers on buying down the rate up front, versus paying the higher interest rate. And you could look into commercial financing or DSCR products.

And, the truth is, interest rates are historically speaking still pretty reasonable right now. Just factor it the cost of financing on the front end, and keep grinding. 

Quote from @Alexis Herrera:

 Awesome thank you for the detailed response!

You're welcome! I also sent you a PM with some additional resources to check out.

The mortgage isn't really much of a factor when it comes to liability protection. (But this is really a question to discuss with your attorney. Don't take my word for it.)

An LLC owning the property theoretically creates a "corporate veil" that simply means if you have a claim against one of your properties (a personal injury or wrongful death claim being the worst case scenario that most landlords are looking to protect themselves from), the claimant can not go after your personal assets, only the assets owned by the LLC. 

But there's more to it that just placing the deed in the name of an LLC. You also need to keep separate accounts and bookkeeping for each LLC, and avoid any commingling of funds. Using the money in your LLC's bank account to buy yourself a pair of sneakers or pay your personal electric bill can make your corporate veil easier for a plaintiff's attorney to "pierce". (An attorney could argue that your LLC is total BS, as evidenced by the fact you used it to buy yourself Taylor Swift tickets, and a judge or jury might agree).

Another crucial component of liability protection is your insurance coverage. Many investors make the mistake of changing the deed over to an LLC, but leaving the insurance policies in their personal name. This can create the risk of claims being denied on the basis of you (personally) not having an insurable interest in the property, since it is not owned by you; It is owned by a corporate entity. Much like you cannot take out an insurance policy on my house (and expect to be paid when there is a claim), because you don't own my house. 

Also note that if you ask an attorney, a CPA, and a mortgage broker how to structure your LLCs, you're likely to get three different answers. There are liability issues to consider (so the attorney will tell you one thing), tax implications (so the CPA might tell you another), and financing limitations (you can't get a conventional mortgage in the name of an LLC, and the due on sale clause noted by another poster) to consider. So it's important to understand the nuances and figure out what works for you, because there is no one size fits all solution.

Quote from @Nicholas L.:

@John Stamos

I don't see how anyone can answer this for you, since you can be successful in any of those classes.

What are your goals?  How active or passive do you want to be?  How much ownership of the asset do you want?  How much diversification do you want?

@John Stamos nailed it. All of these strategies work (that's why they exist). Figure out what you want to do.

My advice would be the old adage: Don't wait to buy real estate, buy real estate and wait. 

And an important corollary to this is to not get caught up in analysis paralysis. 

Welcome! I'll send you a PM with some BRRRR case studies you may want to check out!

We see the same thing with mid-term rental management in St Petersburg FL - More than half of our inquiries through Furnished Finder are non-nurses. 

Travel nurses are a great example of a target market that has a demand for medium-term furnished housing, but they are only one example. 

I think one positive is if you design your property and your marketing with travel nurses in mind, you will still attract the others.

Quote from @Peter Walther:

Quote from @Jeff Copeland:

Quote from @Peter Walther:

 Please send me the link I'd enjoy looking at it.  I pretty familiar with the process send I've retained attorneys throughout the country to bring them to clear title for insureds of the various title companies I've worked for.  That's why I'm pretty sure the process is not as simple as just bringing a suit.  You have to have a basis for while the title should be quieted.

I think you have to have an actual claim against the title in order for your title insurance to respond (and pay). Title insurance won't step in just because a defect exists, only if someone tries to use it, so to speak. 

But, as a property owner, I don't see any reason why you couldn't quiet title at your own expense to clear up a known title defect. And in many cases it might be advisable to do so. 

That's true for a mtgee policy, as long as the insured mtg is current and the prior interest holder isn't trying to enforce its claim there is no loss recoverable but under an owner's policy it's presumed there is a recoverable loss simply because there is a defect.  The reason is because the way a loss is calculated is different under each policy.

Once again, you need to give the court a reason why it should quiet the title.  For example, if you can show the debt was paid off and the lender simply failed to record a release or if you can show a statute of limitations has barred the enforcement of the debt as a lien on the property would be a basis for the suit but simply asking the court for relief because you didn't know the prior mtg was there when you bought the property and you can't sell or borrow against the property probably will not be sufficient to get the court to quiet the title and a good attorney probably wouldn't waste your money filing the suit.

 We are essentially saying the same thing. I never suggested you could use a quiet title suit to wipe out a valid mortgage or other lien. Only to clear up a cloud on title 

Quote from @Peter Walther:

 Please send me the link I'd enjoy looking at it.  I pretty familiar with the process send I've retained attorneys throughout the country to bring them to clear title for insureds of the various title companies I've worked for.  That's why I'm pretty sure the process is not as simple as just bringing a suit.  You have to have a basis for while the title should be quieted.

I think you have to have an actual claim against the title in order for your title insurance to respond (and pay). Title insurance won't step in just because a defect exists, only if someone tries to use it, so to speak. 

But, as a property owner, I don't see any reason why you couldn't quiet title at your own expense to clear up a known title defect. And in many cases it might be advisable to do so.