All Forum Posts by: Julie Ferrier

@John Morgan, I never did the QCD to the LLC, so it was a fairly pointless LLC.

If you don't have a loan on the property, I imagine the QCD would be simple enough. Where you may need legal help is if there is a loan on the property in the LLC name. You could start with a call the note holder and ask them if they have any guidelines, just to get you started.

@Jeremy K., I ended up dissolving the LLC and buying an umbrella policy. I have 5-6 policies with the same insurer, so the 1 million dollar umbrella policy was pennies per day. MUCH cheaper than the LLC, and significantly less hassle.

Funny story, I had a real estate agent walk through the property and tell me what she thinks the asking price would be if I chose to sell it, and offer suggestions for improvements to make if I wanted to sell in a few years. Turns out the tenants had been house hunting, but didn't want to move, so... they bought it as is, at the top of the market for full price. 

I bought another property in another state, and since I have the umbrella policy, it was easy to keep and I didn't have to deal with the LLC business again.

Best of luck to you!

@Joe Splitrock, I had initially forgotten to ask about utilities and found out that it's a $200-$250 monthly bill for the LANDLORD and I had forgotten about lawn maintenance in my math as well. The numbers still work out, so I'm putting in an offer and will make sure I get a good inspector out there. 

I'm starting to think that since the neighborhood isn't top notch, other landlords are passing because it doesn't offer as high of returns as something in a formerly shady neighborhood should. This could be a huge gamble - it might be worth less in 5 years than now if the neighborhood goes back to bad, or 2 or 3x if the neighborhood continues to improve. 

@Gabriel Galarza, Good point. I did check out crime in the area using the local PD data and searching both the streets the units are located on to narrow down crime in the immediate area as well as the neighborhood. Crime has gone down over the past 10 years, and the neighborhood *appears* to be up-and-coming.

@Carolina E. and @Thomas S., I would definitely get an inspection! And I have a trip planned for a couple weeks from now; I can't get out there any sooner. Thanks for the good advice!

@Peter M., yes, we found it on the MLS, and that's *exactly* why my gut is telling me something might be up; why are the other investors passing? Maybe they're just getting better deals off market so they aren't interested in this slightly lesser good deal? Or maybe I'm just lucky to have gotten to it before they did? Or perhaps they aren't interested in adding this particular type of property to their portfolio right now? There could be so many reasons; if I don't move on this, I might lose out on a good deal for fear that it's too good to be true when it really isn't.

So, my question is... do I let my gut rule or the numbers rule?

I'm looking at a quadplex out of state. I'm in California, the property is in Texas.

I have total faith in the real estate agent, as I have known her for 15 years and trust her judgement. She thinks it looks good and likes the neighborhood, even though it's not the best area. An "in transition" or "up and coming" area.

At the asking price, the numbers work out too, over $100 per door after 20% reserved for CapEx and Vacancy (total, not each).

But... I feel like this is one of those "if it's too good to be true, it probably is" moments. If it cash flows so nicely, why are they selling it? Am I crazy?

Hi Mauricio,

If I'm reading this correctly, you're asking if you'd be able to buy a primary residence 2 years after an investment property and wondering about first-time home buyer loans? Typically, your first purchase counts as your first purchase, regardless of what you buy, so anything specific to first-time home buying would either have to be used on your investment property or forfeited. 

The good news, however, is that you will always get cheaper financing for a primary residence than an investment property, independent of the fact that you bought it after an investment property.

Julie

Another investor told me about it.

Thanks, all! I was leaning in that direction, but I am glad to hear others opinions as well! I will start investigating umbrella policies to replace the LLC.

I bought a house to live in in 2010. When I moved out of state 4.5 years ago, I turned it into a rental property. After doing a bunch of research, I decided to move forward with putting my property into an LLC, as I was planning to buy some additional real estate and figured it was my best bet to lump all of them into an LLC to protect myself.

I refinanced the property last summer after spending a good number of hours researching banks to find one that would allow me to drop the property directly into the LLC at the close of the refinance process. I found one! We moved forward, and I reminded my agent about a dozen times during the process that we MUST put the property in the name of the LLC at the end as I didn't want to go the route of the quitclaim deed, and she always nodded her head and said she remembered.

At the end of the process, she looked at me blankly and stated that there is no other option but to go the route of the quitclaim deed, as no bank has the ability to do a refinance in my personal name but put the deed in the name of the LLC. And then she threw me this curveball: The bank I had just completed the refi with has a policy to call the loan upon receiving the quitclaim document.

Here's the summary: I don't really want to refi again, but I now have this useless LLC that I can't put my property in and it's costing me a few hundred bucks a year to just sit there and not protect me. Due to the heat of the market and losing my ground team (also to relocation out of state), I've decided to not buy another property in that state in the foreseeable future.

Should I dissolve my LLC? Should I refinance again to a bank that doesn't have such a policy? Should I chance doing a quitclaim and cross my fingers that they don't call the loan?

Thanks in advance for any suggestions!