All Forum Posts by: Jeffrey S. Breglio

Great advice from @William Hochstedler and @Nick Fullmer. Pick one investment tool. Focus on that and learn it well. Then move on to another tool. There's a a lot in real estate investing and it can get overwhelming. 

Jeff

Ludmila:

You're welcome!  I hope you find a competent, trust-worthy attorney and are able to build a lasting business relationship!

Much Success to you,

Jeff

Welcome! There are great REIAs here in Utah. SLREIA, in Salt Lake. Utah Valley REIA, Norther Utah REIA and Utah REIA. All have monthly meetings (like $100 a year to join) and luncheons (free). Start networking and getting to know other investors, learn the different types of investing, pick one you want to focus on and learn about it. There are plenty of ways to get started with no cash in pocket that you just need to learn! Then get at it! I have a ton of free info on my website if you want to check that out.

Jeff

Here's copy and paste that I often send to people considering doing deals out of state. It's doubly true for partnering situations.

Nearly every "really bad" deal that comes across my desk stems from investing out of state. Seriously! As a lawyer, I'm only brought in on the bad deals. And there are good experiences, too. But it is a much more difficult process when you can't personally oversee your investments. I generally tend to advise away from doing so. But, I don't want to rain on your parade either. So here are just some tips.

Be very careful about partnering with someone there. This is where most investors get scammed. Because it's out of state, investors almost have to seek someone local to work with. Be careful and choose wisely.

Thoroughly vet any one you do business with, just like your tenants--criminal, BK, credit reports! If you can make it out there, network in the REIAs and talk to others about potential partners.

Do a double blind comparison: Work two people at once and don't inform one about the other to get two different opinions on a particular deal. Like two agents, for example, to see if one is over inflating the numbers.

Don't jump into a big project or multiple projects. It's easier to walk away from one bad property than 10.

Have proper documentation for every transaction, every detail in writing. And make every transaction independent of the rest. The more you commingle with the partner, the more difficult any one issue is to prove, and get out of.

Hold partner accountable every day. If there is even an inch of impropriety, you can bet there will be more. And it will be much more difficult to extricate yourself.

Have an independent party on your side. A title co. RE agent or PM. Attorney. CPA. Bookkeeper. Someone that only works for you! Always demand ALL paperwork from every transaction from the closing company itself. Don't wait for the partner to send. 

Pay an agent or someone to swing by house to check on it and to be your eyes.

And, and this is NOT a bad thing, don't trust anyone. It just means to take control of the situation.

I'm sure there are more tips. But happy investing!

Jeff

@Jon Q., since you mentioned the second approach, then I assume you want to transfer the properties before the owner dies. In that case, probate is irrelevant. That's only an issue if the owner of real estate or business entities dies without a trust. (FYI, the owner should definitely have trust, and transfer on death agreements with the business entities irregardless of what he does not with the properties--he could die before accomplishing anything.)

Any transfer for property, except to a family trust where the borrower stays on as a beneficiary, violates the due on sale clause. This topic is discussed ad nauseum on this site. And nope, there's no way around that. I've made my position clear on here that it's not an issue that should really worry you. Long story. We've been putting properties in LLCs for decades and the number of loans called due is negligible. And not usually a big deal if it happens. This is always for asset protection purposes and standard procedure. I always recommend it even if he's not trying to pass the properties to kids. 

If he were my client, I'd explain the risk and recommend the LLC route.

Jeff

The question is incomplete. Important part is WHEN do you want to transfer the properties. 

If you want to transfer AFTER death, then use the family living trust. This does NOT violate any due on sale clause and avoids probate. And it passes the asset free of estate tax up to approx. $5.5M for an individual and approx. $11M for a married couple. Only a trust can do this. Not a will! And the properties must be titled in the trust. 

If you want to transfer DURING your life, each person can gift approx. $17k each year to any one tax free. So, a married couple can gift about $35k to each child each year. You can accomplish this through a trust by slowly adding benificial interest, or through a LLC by slowly giving membership interest, or by adding slowly as tenants in common on title. If you go down this road, work closely with your attorney and CPA to stay within the limitations. I've helped numerous clients with this. This could also kick in the due on sale clause. And there's no way to avoid this. The trust route will be the smallest red flag to a bank.

Happy investing!

Jeff

I haven't seen anything concrete yet. But...

If you want, we can meet at my office on FRIDAY, DECEMBER 4. That should give people time to plan. and a concrete time.

Let's say 9am, Friday, December 4,at 234 E 2100 South, SLC.

why don't you email me an RSVP and I'll have some OJ and bagels.

Let me know if that works.

Jeff

Hey everyone. Ya don't need me. :) All great advice! It depends on the fine print of the lease. Generally, a landlord cannot force a tenant out for showings, or even make them clean. I've never seen that in a lease. Typical is just 24 hours notice for landlord to enter. Further, a landlord cannot breach the lease by terminating before the end of the "term" of the contract. That is, landlord cannot force tenants out before the end of the term. Knowing the actual "term" might take a review of the lease, and any extension addenda to confirm. But, if the actual term is through the end of the summer, landlord cannot force them out before that term. Any buyer would take the property subject to that lease.

If the landlord is a licensed agent, or using an agent, they should know that. And the tenants should call the Division of Real Estate, or an attorney, if they think the landlord is strong-arming them.

Jeff

@Curt Davis, when you transfer, just make sure your homeowners and title insurance polices cover the LLC and you. This is easily corrected by notifying the title co and your insurance agent of what you're doing and tell them what you need. There are policies that will cover your LLC. If they aren't able to, find another agent and title co who can.

Jeff

Hi Alison, Good to see you here! And welcome. As a client, you can always call me. But I do want to provide just this bit of information.

Nearly every "really bad" deal that comes across my desk stems from investing out of state. Seriously. As a lawyer, I'm only brought in on the bad deals. And there are good experiences, too. But it is a much more difficult process when you can't personally oversee your investments. I generally tend to advise away from doing so. But, I don't want to rain on your parade either. So just some tips.

Be very careful about partnering with someone there. This is where most investors get scammed. Because it's out of state, investors almost have to seek someone local to work with. Be careful and choose wisely.

Thoroughly vet any one  you do business with, just like your tenants--criminal, BK, credit reports! If you can make it out there, network in the REIAs and talk to others about potential partners.

Do a double blind comparison: Work two people at once and don't inform one about the other to get two different opinions on a particular deal. Like two agents, for example, to see if one is over inflating the numbers.

Don't jump into a big project or multiple projects. It's easier to walk away from one bad property than 10.

Have proper documentation for every transaction, every detail in writing. And make every transaction independent of the rest. The more you commingle with the partner, the more difficult any one issue is to prove.

Hold partner accountable every day. If there is even an inch of impropriety, you can bet there will be more. And it will be much more difficult to extricate yourself.

Have an independent party on your side. A title co. RE agent or PM. Attorney. That only works for you. Always demand ALL paperwork from every transaction from the closing company itself. Pay an agent to swing by house to check on it. 

I'm sure there are more tips. But happy investing!

Jeff