All Forum Posts by: James Palassis

An umbrella policy kicks in if you are sued for amounts over what your typical homeowner's policy covers. If someone slips and falls down your stairs, or if there is a horrendous dog bite/attack, if someone sues you for exorbitant medical costs over what your homeowners policy covers, your umbrella policy would kick in and pay without you having to dip into personal funds. It's relatively cheap compared to the amount of coverage provided. We keep a $2M policy. 

Thanks. Did you have anything of value or substance to add that might help the OP?

I transitioned from buying in the LLC to buying personally to get better financing. Although your lender can say they would not exercise the due-on-sale clause, without something in writing, that's meaningless. The reason I am choosing to hold title personally (with a large umbrella insurance policy) and not transfer over is because, looking through the bank's eyes, if interest rates go up significantly, I would want to force all those paying super low interest rates into higher interest loans.

If you are paying 3%, but in 5 years the going rate is 7%, they could call the note due and you'd be stuck having to refi into a 7% loan (or if you chose to keep holding in the LLC, you'd need to do a commercial loan, which means higher rates and/or shorter terms).

I know "everybody does it," but I just feel better keeping it personally. I have 7 loans with the same lender. Transferring them to the LLC and getting them called would reek havoc for me.

I always get a CL100 (usually a lender requires it) stating there is no active termite activity. After that, I do not put my properties on a termite bond/prevention plan. I'm curious to read other responses to get a sense of what others are doing. Good question. 

Regarding pest control, I will pay for the first treatment. After that it is on the tenants. 

@Ashish Acharya and @Dave Foster thank you both very much for this information. I'm going to push for closing my sale before the purchase. I will only be realizing about $25000 in cap gains, so not sure the juice would be worth the squeeze on the reverse. I think I'll be at the mercy of the titlework. Thank you again for your help!

I am under contract to purchase a property (closing set 8/4/21). Through a stroke of luck, I have a cash offer on one of my rentals (it's vacant due to a tenant turnover). 

I'd love to be able 1031 my sale and use the proceeds to pay for a portion of the property I have under contract. My concern is if the sale does not close before I have to close on the purchase. If that happens, can the proceeds from the sale be used to pay down the loan on the purchase (my identified property) if using a 1031 exchange? 

Trying to get a ballpark on what sellers are getting in terms of owner financing these days. I've got a free and clear property that I'm ready to unload. I like the idea of owner financing, but just don't know what to ask for as far as interest rate, amortization, down payment...

Just spit-balling, I was thinking something in the neighborhood of:

20% down

8% amortized over 30 years

Balloon in 5 to 10 years

But that's an absolute shot in the dark. Any direction from SELLERS who have sold using owner financing lately would be greatly appreciated!

Find out from your local REIA who is the preferred RE attorney in your area. Changes are they have drawn up thousands of promissory notes and mortgages using private money. Using an attorney will ensure everything is recorded properly.

I was in the camp of running everything through the LLC when I bought my first couple of properties. Another avenue you might use is to find your local REIA and ask for input from the folks that have been doing it in your area. Our REIA has a group email function so you can ask this type of question and get localized advice. I found a local lender that let me do 15 year term with the downpayment terms I needed. They gave me a shot on the first couple, so due to the relationship I have stuck with them.

@Alain Labrada my comfort level is 50% equity in my properties. I realize this will inhibit fast growth, but we all have different goals. Our primary is paid off and we have positive cash flow from our W2 jobs, so once the $50 refinance comes in the HELOC will be paid off and we'll be ready to repeat. I guess it's just a more conservative BRRRR approach. Best wishes on your investing!