All Forum Posts by: Jean G.

Hi Brigham,

nice meeting you! I own one property in Hatch and would be interested in additional properties from 1 to 50 units in Washington, Iron, Garfield and Kane counties if you find anything interesting. I'm not opposed to rural areas like Panguitch and Kanab either, however everything I've look at in Southern Utah in last year seemed very expensive compared to other areas (Vegas and Northern AZ) and rents are rather depressed.

Jean

Hi Rochelle,

I look forward to meeting you at @Phillip Dwyer's next meetup in Henderson.

Jean

Hi @Bill Gulley,

thanks for you input! If I make the lender a member in the LLC, but he is not in fact actively participating in the management of the property (maybe because he is far away, or because he has no experience with real estate), and I not then creating a security once again?

Jean

As for the nice fixed 30y loans that Bryan mentions, you can still get them in your name, close in your name, move the property into a land trust (or generic grantor trust in states like Nevada), and then assign the beneficial interest of the property to the LLC.

Having the property sit in the trust as far as the recorder is concerned ensures that the bank won't exercise the due on sale clause.

Jean

Hi Lalaine,

what was the issue operating it as a vacation rental? Is there a problem with the HOA?

I heard from several different sources that vacation rentals in LV are doing very well (as long as you don't have HOA issues), and since the house is already furnished, why not continue with this?

Jean

@Ess Dee

Conventional lenders will always ask you if you're a citizen, and when you're not, the next question is about your immigration status. I know because I'm not a US citizen and get asked every time. They'll not issue you a conventional loan on a Visa Waiver program. I think that's part of the Fannie/Freddie guidelines.

So you definitely need to find non-conventional programs. I would try speaking to B2R Finance which told me once that they could lend to non residents. And as another poster mentioned, you could also ask your home bank in UK if they would finance a US property. You may have a currency risk though. A friend of mine purchased a property overseas with his home bank in France, although they required colateral in France.

Jean

@Michael Wentzel

Just curious, in which market are you finding these $50k properties that rent for $800?

To answer your question: I personally use a Nevada Series LLC but you are correct that they are less proven. The advantage though is that I can spin up a new Serie in minutes by signing a new operating agreement (we don't require Secretary of State registration for each Serie in NV) and my costs are greatly reduced versus having regular LLCs for each property.

Jean

Thanks Bryan for your contribution. In fact besides the in-state/out-of-state distinction that you mention, there is also another distinction for foreign lenders/investors (which some of the people I'm talking to are) in which case some of the SEC oversight doesn't apply at all because they are non residents. I will be investigating this further with a SEC attorney and report back a definitive answer if I get one.

Jean

Thanks Brian. That definition of a security is very clear the way you write it. I will seek legal advice and see what they think about it. I like to post things here first because I always learn something new, so I can interact better with the attorney and ask the risk questions.

Jean

@Charlie Fitzgerald

Thanks for the referral to the RE attorney. Just to clarify, the "lenders" I am talking about are not professional hard money lenders like yourself, but rather high net worth individuals who are not involved in real estate, and to whom a 5% rate sounds very exciting compared to 1% on their savings account. I completely agree with you that my model is not interesting for professional lenders.

@Christopher Brainard

Thanks a lot for the info on Meadows Bank. I believe the contact there is Shawn Pitts and I have spoken to him several times. The 6% fixed rate is for a 5 year term from what I understood. But whenever I have a property with equity available, there are other better (longer term rate) solutions available. For example Clark County Credit Union has a 15y fixed rate at 5%ish, and they will go up to 80% LTV (on both purchase or cash out refi). I'm in the same situation as you that I haven't done any loan with them yet, as I still have a few conventional loans available before I reach the 10 property limit, but was gathering the information to have it on hand. I was also able to convince Wells Fargo to do a 30y fixed cash out refi for me recently as a portfolio loan with 5.125% rate. I'm not sure if they'll do it a second time and a third time, but I'll sure try.

I'm also looking at unsecured business lines at the moment, and I know that Meadows won't do these.

@John Aranton

Yes I guess I should have been clearer, by "private lender" I meant a non-professional lender, ie a private person.

I will update the thread if I get an answer on this from an attorney.

Jean