All Forum Posts by: Jerome Hanson

@Jeff B. why is it irresponsible to restate what almost every contract will read: that the lender MAY call the loan due on sale upon transfer of the property?

"It doesn't matter if you're correct or not" Really?

The contracts themselves hint that the due on sale may not be invoked.  Wording matters in a contract and clearly lenders didn't wanna make it black and white.  There is certainly room for negotiation as shown by the word "may".

@Ryan Zickefoose I think the big question I have is, how much per month and interest are your family members charging you for that year?  The other would be.. why don't you just start off with the bank loans?

On the surface it looks great.  You have an opportunity to buy $150k property for $105k and keep them as rentals. 

I wouldn't be dealing with family, but that's just me.

@Nick Romano well, I think we're even going too far when we say that people are "breaking" the contract. It is not a breach of contract because in the contract it states what happens upon sale of the property. In essence you are selling the property to your LLC, which then gives the lender the right to call the loan due. That's a part of the contract, not a breach of it.

I've taken property subject to the existing loan, which is the same issue and yes it rattles the nerves... but the bank knows and they aren't doing a damned thing about it. Why? Because they know I'm the best shot they have of getting their money and making profit.  No bank wants a foreclosure so to risk calling the loan due would probably be pretty rare.

Bottom line.. if you're uncomfortable because it COULD happen or it makes you nervous, don't do it.  If you feel you could live with it and take the chance.. go for it.  Comfort level is key.

@Steve Stackman I'm pretty sure you could solve this problem by creating a quick operating agreement instead of a resolution for each time you purchase real estate. Both of these can be done very quickly by google search. My LLC has an operating agreement specifically authorizing the entering of contracts by any member for the sale/purchase of real estate.

Either way, you can find a template online very quickly.  These are not complicated but in Ohio I'm not sure if the rules are different.  I'm in Arizona.

Saying bye-bye to who? No need to drop your property manager if the rental property is profitable.  If you were referring to saying bye-bye to the military, then in what time frame are you thinking about doing this?

Month to month lease huh? Is there a specific reason they wanted a month to month lease? Is there a possibility of renegotiation for longer leases with the current tenants?

I've just recently set up a www.cozy.co account.  I'm not sure how well it's gonna work yet but all reviews seem to be pretty stellar.  I have taken money orders and ACH before.  I also have a property management on one property.

@Katie Levey I think there are a few things you could do here.  In your position the first thing I'd look for is a valuable partner.  Hopefully someone with good credit and good income who's willing to go in with you on this. You place the down payment or a larger percentage, they put their credit and income on the line (or however you wanna structure it) and you both are on title and split rent profits.

Another option is to look for extremely cheap properties, use hard money lenders and flip them until you've built up enough cash to buy a cheap rental property in cash -- that's a risky road

You could move.  Sell your current property, buy a duplex/triplex and house-hack for your first investment property which you also live in. 

I'm sure some of the other members will have all kinds of suggestions as well.

Good luck.  Whatever you choose, plan out the course of action and be resolute once you've decided.

I think one of the reasons you might be feeling a little down is because you are specifically looking for a house-hack. For me, this indicates that you're also looking for a place to live right now. That's added stress and makes everything a bit more emotional. A house-hack isn't the only way to make REI work for you at first so don't get hung up on that.

I just seller financed to an owner occupant. Nothing illegal. It's just risky. But we are in the business of risk... Just a matter of how much risk you can handle.

Anyone know if Cozy.co allows you to split the rent payment into different accounts?  For instance between a landlord and partner who need to split profit 50-50?