All Forum Posts by: Jeff Caravalho

Hi BP, I have a foreclosure in Oregon that I need some advice on. Property is in Oregon, worth about 280k, 1st mortgage is around 190K, second is around 100K, (repairs are done). Story from homeowners (who are friends of mine) is that it was a rental, tenants did some damage to house and they could not afford to repair & pay mortgage at same time after tenant was booted. Bank said it was going to would work with them, then said bank changed their mind and now won't work with them. Goes to auction/ sheriff sale in 2-3 weeks. They told me about it because they new I was into REI, and did not want some stranger to get it (once again these are friends of mine). They received a "BARGAIN AND SALE DEED" from an investor stating the owner would convey everything (Grantors rights, title and interest including O.R.S. Chapter 18...)to the investor in exchange for a small fee. This form also has a section called "Oregon State Disclosure, for all Real Property" listing a bunch of sections that should be reviewed before signing. They think it has something to do with the owners being able to come back and buy the property for up to 6 months. In a nutshell they are furiuos at the bank and want someone they know to get equity they lost, not bank.

Between my HELOC, cash laying around, and 50k loan from solo401K, I can cover it. My questions are how do I approach the bank to make an offer before the auction? Also, How much should that offer be? Should it be the amount of the first? How much time do I have to get an offer in before the auction? Thanks.

@Andrew Wong, @Tom S., @Timothy Murphy III are there any disadvantages to an umbrella policy that I should know about?  How much should I get?  Any suggestions on Umbrella companies?  Should  the company be in the state I invest in, or is Cali ok?  Thanks.

@David Traeger good question

@Andrew Wong Interesting you say that because I am a sole proprietor. my thought is I don't need LLC to start out, with one house, much like a homeowner with second home they rent out. Once I feel comfortable with out of state investing (B neighborhood , near relatives), start LLC and purchase more property. What are your thoughts on how many properties warrants an LLC? I heard people say to start LLC with 1st house, one for each house. Others say put them all in LLC, or groups of them. Others use umbrella like @Tom S.  I quess it depends on your investment style, net worth and your ability to sleep at night.

@Andrew Wong, so income from a property that you purchased under your name is not business income, thus no need for LLC?

@Tom S. How do you determine the amount of the umbrella policy?  Total value of properties, total equity?

@Timothy Murphy III I agree with overreach statement, doesn't seem right.

@Timothy Murphy III and @Steve Olson thanks for you responses. California charges around $800/ yr for an LLC. I heard an LLC in Ohio is around $450 one time, then another $600 annually for tax prep and legal paperwork. Is this your understanding of the fees in Ohio for LLC setup? Just trying to get a comparison to California's cost.

So how does my friend get away with having 4 houses in 4 states without an LLC? Do you have to live in them for awhile?

If I want to buy 1 house out of state, is there any way I can do it with out an LLC. I'm thinking an LLC will eat into too much profit unless you have multiple properties to spread the cost & make it worth it. I'm not willing to go big right off the bat. I want to take baby steps with one & see how it goes for a year, but the cost of an LLC may make it not worth it. Kind of a catch-22. Thanks.

Hi BP, I'm looking into out of state investing, but am being told I need to have a California LLC to do that (I Live in Sacramento). However, I'm talking to a turnkey company in Ohio who says all I need is an Ohio LLC (much cheaper). My question is:

Where do I need to set up my LLC. Tax person says "By the very act of choosing this company while residing in California, you are exercising management which is defined as doing business within the state". Is he saying as long as I don't use a professional management company, I'm ok? But then what about collecting rent, isn't that business? I know someone who has moved 4 times without selling, so he has 4 houses in 4 different states. He has no LLC. I was thinking of getting just one house, near relatives, and manage through them...for now. If it goes ok, I can set up LLC and go bigger. What do you think? Thx.

@Adam Adams Thanks for the tips!

Hi @Chris Kirk.  2 lots side by side, one has 2/2 that need s work, both have street access.  Not thinking easement is needed.  My main question is about the process of splitting a lot in Sac county.  Thx.

Hi BP, Looking at a 2/2 on a lot zoned RD5. Thinking about turning 2/2 into 3 or 4/2 and flipping. While we're doing flip, split adjacent lot then put duplex on it and hold (or flip). Any thoughts on splitting the lot (cost, time, hassle, etc.), or the idea in general, would be appreciated. Anyone who has done this kind of thing, or is thinking about doing it, your input would be much appreciated. Thanks!