All Forum Posts by: Josh Norell

@Steven Norton I'm in a very similar situation as you were, and am also pursuing the title escrow option. I am also in Colorado. I'm waiting to hear back from them next week. How did your situation turn out?

@Christopher Dunson how did you resolve your situation?

No significant downsides that should scare you off. But a couple notable things...

You'll be limited to 75% LTV on conventional loans, where as you can go to 80% on single family.

The resale market for a quad is less than single family. If you need to sell, you shouldn't have much difficulty getting a decent price, as there are likely many investors also looking in your market. But the liquidity in the single family market is definitely better.

Noisy tenants can cause more of an issue.

Though I feel the advantages of multifamly are greater than the downsides.

@Tom Lafferty sounds like you had a great mentorship experience. Care to mention who you went with?

Originally posted by @Forrest Hayashi:

Originally posted by @Andrew Postell:

@Forrest Hayashi @Josh Norell is correct in that Fannie/Freddie do not REQUIRE that lien to be filed at closing....but we have seen a lot of lenders having issues with that since COVID hit.  So we have been filing it at closing ever since to make sure that most lenders could help us with this strategy.  You could find a lender that is ok with filing the lien after closing, but we'd have to know what lender to use...maybe Josh knows someone that will lend in your area that can help with it? But I'm advising everyone to file at closing to help keep as many lenders open to it as possible.  Hope that makes sense.

@Andrew Postel @Josh Norell

Thanks both! My property is located in Philly.
Does filling a lien automatically puts the deed under the LLC? or i have to hire a title company to do it? Is it necessary to have the deed under the LLC? Would like to avoid title companies since they usually cost a lot (ies,. ~$4k+ in Philly just to close).

No, the deed stays in your personal name. You file a promissory note and deed of trust listing your LLC as the lender at the county. It's easiest to have the tile company do this at your initial closing, but you can do it yourself. Though to make sure it's right, it may be worth paying the title company to assist you in writing up the documents your first time. I imagine they'd do this for <$500. Filing at the courthouse is not expensive. It's about $30 in my county.

The lien is filed by the LLC, against your person. Not the other way.

@Forrest Hayashi, I'm not a CPA, an not qualified to comment on the accounting aspect of this arrangement. As far as the bank is concerned, I don't believe there is anything in the Fannie/Freddie requirements that state a paper trail for this situation is needed. Though that mean that any particular bank doesn't have additional requirements/overlays for this documentation. @Andrew Postell would know much better than I.

I will emphasize the importance of finding a lender who is able to see this loan through. I attempted a refi with a bank who said they could complete the transaction. After paying for the appraisal, and 2 months into the process, the bank backed out of the loan. The appraisal came in lower than expected, causing a situation where I would need to either A) bring money to closing to bridge the difference between the existing lien amount, and the amount the lender would loan. Or B) have the LLC write a lower payoff amount on the existing lien.

I didn't have the money at the time for A. And if I went the B route, the bank was requiring documentation for making payments on the loan, which I did not have. As a result, I was out 2 months, and a $900 appraisal.

This payment documentation must have been a requirement of that specific lender, as I completed this loan later with a different one.

Originally posted by @Forrest Hayashi:

Thanks Andrew! appreciate you sharing the wisdoms!

Looks like I am outta luck using this method for now as I have already purchased the property directly with cash but I'll be sure to use this method in my next rehab project!

Lenn, not true. You could file the lien at any time after the purchase. Like you mentioned, you can after the initial purchase form an LLC, and file the note and deed of trust(depending on your state). It doesn't have to be filed at the time of purchase. You can file it yourself if you're inclined.

Last I knew Adams Bank and Trust would go up to 75% LTV on an investment property.

Originally posted by @Steven Westlake:

Josh Norell -

Mudjacking can be an alternative to replacing concrete in some cases.

please explain

I had a house once that had badly sunken/cracked concrete in the garage, creating significant unevenness, and about a 2" gap between the garage door and the concrete. Replacement would have been 3-5k. I had it mud-jacked for $750, which got it even enough, and closed the gap. I wouldn't recommend this on a higher end house, but for the median or below it's an acceptable solution for me.

1/4 drywall over popcorn ceilings and wallpaper

Mudjacking can be an alternative to replacing concrete in some cases.

Resurface old tile, tubs, and countertops if they're in good shape

Definitely vinyl plank in rentals

New scratch and dent appliances, if you can find them.

Amazon for pretty much all plumbing and electrical fixtures

Rip down  3/8 plywood for cheap shiplap.

Using contractors who are budget conscience can save a ton. They can provide ideas of how to do things cheaper, re-use materials where appropriate, etc.

Proper planning and foresight of a project. Think ahead and shop around for what you need ahead of time to get the best deal. Don't get stuck needing something "today" and have to get whatever is available.

Accidental post