All Forum Posts by: Josane Cumandala

The "standard" varies from state to state. State government regulates the licensing of appraisers so you'll need to hop onto your state's division of licensing services or what have you for the list of certified appraisers in your area. 

From your question I have a feeling you dislike the value an appraiser came up with. Just because you disagree with an appraiser's conclusion doesn't make one of you right and the other wrong. A skilled appraiser will address the macro and micro economic trends in their report and explain their reasoning. If there is little to no support or reasoning in the report for their adjustments it probably isn't a good appraisal. If the value they present is not reflected in first three comparable sales...it probably isn't a good appraisal. Read the report carefully and see how the appraiser came up with their conclusion even if you don't personally agree with it. The report itself will tell you if the appraiser is skilled or not. If it is a supportable opinion and you just happen to dislike it that is no reason to attack a professional appraiser. 

Definitely retain your own asset protection attorney. California is very difficult and taxes LLCs aggressively. I read in Garret Sutton's book "How to Use LLCs and Limited Partnerships" that California will charge you *more* for series LLCs, not less. Additionally series LLCs are relatively new with not a lot of case law setting precedent for how to deal with them. You do not want to be one establishing the precedent in a law suit. I would read a few books on asset protection and the entities you're interested in so that you can better screen your attorneys and retain the best help. Good luck!

I guess I'm undecided because a primary residence is not going to generate passive income for you so I see no net positive with either option. Sure you can sell the home when you retire but will the proceeds of the sale after taxes and broker fees really net you a profit after a down payment and decades of property taxes, debt service, mortgage interest that you can no longer deduct from your federal taxes, repairs and homeowners insurance? I don't know about all that. Also, both a 401k and a primary residence both assume the economy will not be in a contraction when you go to retire - an assumption that has burned countless many people.

I would focus on creating passive income before worrying about a primary residence. Saving money for the future is far easier to do with two, three or more income streams rather than just one.

Real estate appraiser here. I personally like my job a lot, but there's a lot of red tape to get through to become an appraiser as opposed to say a real estate salesperson. Feel free to pm me and I can tell you about the pros and cons of the field. :) I would say whatever you decide, because you're here you want to be an investor. Any job can only do so much for your income because you only have so much time in a day. Passive income is the key to financial independence. Good luck!

You can contest the appraisal if you can provide sales of homes in your area in similar condition that sold for your price with finished basements. You just have to line up apples to apples, so make sure those homes similarly have a significant amount of finished space below grade. 

Also sometimes the highest offer isn't actually the best offer unless it's all cash. But if you wish to stick with this buyer you could offer to owner finance the $50k difference.

How would any of that necessarily cancel out the due on sale clause? You're still transferring the title out of your own name on a mortgage that is not assumable. I'm not saying the attorney is wrong, I just do not understand the rationale as it's been stated.

Try posting it in the "properties for sale" section under the "marketplace" tab on this site. I'm sure someone here would be happy to take it off your hands. :) 

Necessary? I suppose it depends on your specific investor identity and situation but probably not. 

Rather than be pressured by a sales pitch perhaps consult an actual attorney who specializes in asset protection regarding real estate in the state you are invested in. 

I have heard arguments for and against land trusts. I'm not an attorney or legal expert but my understanding of it is that land trusts are a way to keep your name out of public record. It is not the same thing as an LLC and probably isn't a panacea as far as asset protection goes. It's simply a way to frustrate people who like to slip and fall on a property and sue the owner as quickly as possible. If it is too hard to find the owner's name the thinking goes, it's a lot harder to sue them.

For a run down of what I consider to be a reputable advocate of land trusts I suggest downloading episode #74, "Dispelling Myths About the Land Trust" of The Real Deal Real Estate Show podcast by Larry Harbolt. You can find it pretty much anywhere you can download podcasts. Keep in mind Larry Harbolt is not an attorney. He can explain land trusts pretty well and has first-hand experience using them, but he is not a legal professional. 

One of the most notable detractors of land trusts that I know of is Garret Sutton. He warns that land trusts can "cloud title" if not handled properly. He also points out that anonymity is not the same thing as true asset protection, and someone determined to sue you do so will do so if you don't have the proper entities in place. You have an entity set up already and Nevada has very strong asset protection laws in place. The only state I hear compared to Nevada in terms of asset protection favorability is Wyoming. In Wyoming, LLC members are not a matter of public record anyway and if your name is kept out of public record then the land trust seems unnecessary. I would dive in to whether or not Nevada law withholds the identity of LLC members from public record. For analysis of Garret Sutton's positions check out his book Loopholes of Real Estate or his company, Corporate Direct.

Trusts in general are a powerful tool for many different things. Land trusts are somewhat more obscure than living trusts but I'm sure they can be part of a sound wealth strategy if used correctly. That said, your strategy should be devised by you and your team of trusted attorneys and CPAs, and you should do your own research. Someone pushing a land trust on you to make a sale just doesn't seem legit. Especially if that person cannot explain the concept to you sufficiently on their own. 

@Paul Jump if you're going to spend $1 million either way you might as well get the vacant unit and hopefully not have to do as much renovation. I don't see what "return" you're getting if you plan to live in the unit after the tenant leaves rather than rent it out. This all sounds highly speculative to me. If the tenant could be bought out the owner would most likely have done so themselves so that they can list their property for more money. 

Try paying off the credit card debt with a personal loan or balance transfer. It will get you into a much lower interest rate and make the payments easier to manage. 

If you still want to invest in real estate you'll probably need to secure private money or seller financing terms until your debt is under control. It stinks but it is possible, you just have to be very creative and motivated.