All Forum Posts by: Katharine Chartrand

If you care about your relationship with the Realtor, then talk to the realtor.  Good realtors are very pragmatic people whose talent should be to figure out reasonable solutions to situations like this. 

If you don't care about the realtor or your business reputation generally, just take the house off the market and tell the realtor you decided to rent due to unexpected financial problems. They are not going to know it was a lease option.  I doubt that is the first time that happened. 

But you do have to decide who you are.  There is some cost to being a jerk. Is it really less than whatever arrangement the realtor would be willing to make with you? And being frank with the realtor will build that relationship. Short term $$ is not everything if you are in it even for the medium term.

>KNC<

Typically people have to get a mortgage on a SFR in their own name and then deed it to the LLC. I don't believe it is really a sale, but your instinct to involve a lawyer is a good one. This transfer could trigger the due on sale clause in the mortgage, but from what i understand the banks don't generally enforce that.

The lack of credit on a new LLC may be an issue, but that hasn't been the problem for me. They are going to ask you to personally guarantee the loan to the LLC. However, the types of loans available for commercial entities vs individuals are entirely different.

At least one bank I talked to simply didn't have a box for an LLC buying a single family residence...

In my experience, you have to sit down with a very good mortgage loan broker and a very specific situation to find out really what your options are. The LLC with no credit may be a non-issue if the type of loan they have allows you to personally guarantee it. But you still may get caught up on some issue you can't anticipate.

And to some extent you get different answers from different loan brokers. So if you haven't pitched your business to at least 3 brokers, you haven't done enough research.

No picture of the perp was ever posted.  The picture was of a friend of the forger who helped us with the investigation.  That is how we caught him.  

There is no back room deal.  All evidence has been provided to the police.

@Account Closed 

Do you actually read posts before responding?  Just curious.

>KNC<

I am glad he got caught!  Sorry you went through that.  This has been an ordeal for me.

>KNC<

It should have been clear from my post, and from a clarifying update, that picture  was of a the kid who cashed the check, not the guy who forged the check.  The kid is not guilty, was duped into cashing the check, helped us find the guy who forged the check and provided a written statement to us.  I did remove the picture when it became clear that people were not reading the posts and making assumptions about the kid.

Anyways,  the private investigator met last week with the kid who cashed the check. The kid identified the forger (unprompted) and provided a written statement.  The kid did not get any money from the illegal transaction, he did it as a favor to someone he believed was a friend.  The kid, and his mom, are apparently completely freaked out about being involved in this.

The private investigator met with the guy who forged the check today.  After thirty minutes, the investigator had a  commitment from the guy to repay me and a signed written statement that will put him in jail if he does not repay me. 

If anyone needs a private investigator, Glen Holmes, H&H Investigations, Santa Fe.  He works outside New Mexico.  I have never seen anything like that.

@Steve Babiak 

Good point.  I'll ask the moderator to remove the picture.

thanks!

You might be able to partner with your LLC to buy a house, but it may take the creation of a separate entity, like an LLC owned by your IRA. IOW, the IRA is a member in an LLC and you partner with that LLC in the creation of a second LLC that owns the house. The IRA would have to be more than 50% owner of the LLC owning the house.

You would need to talk to the people advising you on your 401K trust.  If you don't have anyone, try mark nolan at mysolo401K.com. That would all be non-trivial to setup and manage and requires expert assistance. 

You will run into problems getting a loan. I believe the loan would have to be non-recourse, since you can't borrow against any property owned by a retirement trust. But this may not be the case.  What is ambiguous is what rules apply to the trust itself and what rules apply to an entity or business the trust has invested in. 

If you need a non-recourse loan, I've never observed a non-recourse loan in the wild, although people on this forum do suggest they exist. It's not easy for an LLC to get a regular loan and it sounds like you need one. The first thing to do is to figure out whether financing is even available to you for that scenario.

 I push the solo 401K model pretty hard, but I will not be getting into deals with my 401K trust. You may be able to find an advisor who tells you that you can do it , but you introduce a compliance risk no matter who tells  you it is okay.  The IRS language prohibiting self-dealing in retirement trusts is very clear and, in my opinion, well supported by the logic of the program. 

Retirement Trusts are a trust for SOMEONE ELSE .... the old person you will be 40 years from now who does not want to work. The government set these mechanisms up for the benefit of that person so they won't have to take care of you. The self-dealing rules are intended to prohibit you from taking money away from that person. When you invest in an LLC with your retirement trust, there are many ways you can intentionally and unintentionally cross the line.

The compliance issues around getting into deals with your 401K is ambiguous space at best. You would want to have very good counsel so you don't risk violating the rules of the 401K. For me it has not been worth it.

@Ana Nomys 

I agree with you about being careful of false accusations. I had other reasons to assume it was Joe Sandoval, but couldn't be sure.  That is why I hired a private investigator.  This kid named Joe without being prompted.  He would have had absolutely no reason to assume that was the guy we were expecting.  I am now sure this is not a false accusation.

But I spent $600 to be sure that I was not making a false accusation.  And there is no award check for me, and likely no conviction for Joe. I spent the money mostly to make sure I knew who was stealing and I didn't fire the wrong guy. 

I am fortunate to have the money to do the right thing.  It was very expensive, most people would not have the money.  I am out the $800 he stole, plus another $480 he probably stole but I can't prove it, plus $600 for an investigator, plus a two week delay on finishing one of my fix and flips to deal with personnel issues related to this whole thing.

@Jerry W. 

@Steve B. 

Thanks for your supportive comments.  I gave the guy a good wage and good work and I don't deserve to be treated this way.  I don't think I'll get the money back, but there may be an avenue available to see some consequences.

>KNC<

So, I hired a private investigator to track down the person who cashed the check. This is not hard.  You need a valid ID to cash a check and that information is written on the check.  

And here he is holding a copy of a forged check that he got from a friend to cash.  The friend is someone who did some work on one of my flips. Apparently, the guy stole a check from my purse, forged my signature and made it out to this kid. Then he asked the kid to cash the check and give him the money.

The investigator sent me this photo with an statement from the kid about how he got the check and what he was asked to do.

So now I know who stole my check and forged it. And we can sit down and have a little chat.  I've been careful to maintain a good relationship with the worker, although I suspected him all along. I should be able to setup a meeting.

The prospects of police action are low in Santa Fe, NM.  The poor sergeant who assigns cases told me that the detective who investigates white collar crime retired 3 months ago and has not been replaced.  And he has no idea when he will have someone who can look at this stuff.  But I guess we give the evidence to the police.

Contemplating my options here.