All Forum Posts by: Jacob Fedechko

Congrats on paying off the student loans, @Jake Vayda! It was smart of you to clear that off your plate before investing. I have not done anything similar to what you are describing (yet) but I do plan on doing some long distance BRRRR deals in the future. The only advice I can provide is general - find good people and treat them well. Good luck!

Generally, the residential mortgage agreement will contain a paragraph like this: 

"Borrower shall occupy, establish, and use the Property as Borrower’s principal residence within X days after the execution of this Security Instrument and shall continue to occupy the Property as Borrower’s principal residence for at least one year after the date of occupancy, unless Lender otherwise agrees in writing, which consent shall not be unreasonably withheld, or unless extenuating circumstances exist which are beyond Borrower’s control."

I do not know where the house is located or what law applies (and you should consider speaking with an attorney licensed in your state), but if your agreement contains a provision like this, then you should raise the issue with your lender.  If you are able to come up with a decent reason for not being able to live in the property, then the lender should (and may be required to) let you rent it out.

It is important to be upfront with the lender.  If you decide to rent it out after 3 months without the lender's permission, then you may be in breach of the mortgage agreement and that could trigger an acceleration clause, meaning that you would have to pay the entire loan amount in a short period of time.  

Again, all of the above depends on the specific language in your mortgage agreement.  Definitely read the agreement closely.

I do not practice law in New York (and you should contact someone who does), but my best guess is that this is a contract issue.  If your rental agreement says that the tenants have X days to dispute the charges and they delay, too bad for them.  But if your contract is silent as to that issue, then tenants may have the duration of the statute of limitations period (my guess is about 6 years) to dispute the charges.  If your contract says that smoking pot/possessing illegal substances on the premises results in forfeiture of the security deposit, that should also cover you.  Hope this helps. 

@Shafi Noss, please check out my reply in your other forum post.  Feel free to reach out if you have any questions or need a referral. 

With respect to formation, I recommend forming your holdco LLC in Delaware. Delaware has a very sophisticated LLC Act that is fine-tuned on a regular basis by the Corporate Law Council. Perhaps most importantly, the Court of Chancery has an established body of precedent and great judges, so in the event of a dispute you will get a fair process and well-reasoned decision.

@James Masotti is right, if you do not have a physical presence in the state, you will need to appoint a registered agent like CSC.  This is what the majority of corporations and LLCs in the country do.  I personally think it is worth using a registered agent, and I can see one being helpful for the reasons that James mentioned.

Regardless of where you form your company, the most important document that you will need to have drafted is the LLC agreement, which will define your legal relationship with the LLC and your partner. If you decide to form in Delaware and need a referral, send me a message. I have represented LLCs and LLC members in litigation and transactional planning and can recommend other attorneys in the area.

Congrats @Mike Bonadies!  Sounds like a great deal.

@Mike Bonadies, that is the best description of Woodstown that I have ever seen.  

Investment Info:

Single-family residence buy & hold investment in Glassboro.

Purchase price: $202,500

Beautiful three-bedroom home in Glassboro's historic Chestnut Ridge neighborhood. More details to come after renovations are finished.

What made you interested in investing in this type of deal?

Location, location, location. The house is located in a great neighborhood and is a short walk away from Rowan University and the surrounding shops and restaurants. There is almost no need for a car. But even if the residents want to have a car, there is enough space to park six or seven.

Investment Info:

Single-family residence buy & hold investment in Glassboro.

Purchase price: $202,500

Beautiful three-bedroom home in Glassboro's historic Chestnut Ridge neighborhood. Short walk to Rowan University and local shops and restaurants. More details to come after renovations are finished.

What made you interested in investing in this type of deal?

Location, location, location. The house is located in a great neighborhood and is a short walk away form Rowan University and the surrounding shops and restaurants. There is almost no need for a car. But even if the residents want to have a car, there is enough space to park six or seven.

This sounds awesome!  Will be there.