All Forum Posts by: Kwanza P.

I’m sorry, but this is extremely irresponsible and uninformed advice. If the use of the money is for personal, family, or household use, @Kwanza P., then the loan is for a consumer purpose and must be originated accordingly.

Even though you ultimately intend to sell, the fact that you will be using the loan proceeds for your residence means your loan will be for a consumer purpose. It must therefore comply with TILA, RESPA, the SAFE Act, Dodd-Frank, and all associated rules and disclosures (for which business purpose loans are generally exempt).

You cannot “stay under the radar of owner-occupied classification” by “moving in after the rehab begins or keeping it under 12 months.” If this home is in California, as you are, Kwanza, it must be originated by a licensed California real estate broker or CFL. It has always been prohibited, but beginning this year in California, brokers or CFLs who attempt to "stay under the radar," as Kyle recommends, now face jail time for making such loans.

“Structuring as a short-term bridge loan” or using “private capital or asset-based lenders that focus more on the deal than the borrower’s living situation” change none of this.

You can find a list of knowledgeable, licensed private lenders who make consumer-purpose loans by searching the member directory at the California Mortgage Association. (Full disclosure: We are members, but we do not make such loans.)

Will this property to so structurally damaged that you could not get a normal loan on it? I am currently doing a live in flip we got it under market value, normal loan and remodeled it within 6 weeks then moved in (with permits). 

Is the property something that will need an engineer/architect to draft drawings to get plans then permits? This will take a lot longer and the traditional lender will not allow for extended time outside the home so there might be some other options. Conventional Rehab loan (this takes some time to get the financing for on it) and FHA 203K loan. These loans provide rehab costs built into the loans to get the work done, the challenge though with these are the higher interest rates and red tape that is involved with them. You can get someone to help you with this process to make it faster and easier, but not sure if you are looking for something like that type of loan.

The other option would be the hard money route, but I would explore all options and it really is dependent on what condition the house is when you buy it and how much work is really needing done. 

As a single member llc, you are taxed as if you owned it personally. No difference. Most of the answers here anout liability aren't helpful if you only own one or two properties. Consult counsel where the property is located. Have all your insurance with same carrier and get a $2-$4 mil umbrella. 

Thanks Dan ! $2 to 4 million for any property? Any location ?

@Kwanza P. you are looking for a clairvoyant I think ... since as right now the bill is very fluid. It includes budget cuts to HUD, shift to the states of S8, and limits in voucher time for able bodied adults. For the first two you can expect increased state taxes to compensate somewhat. What I have seen for the third is when in non-housing programs you limit by diagnosis or being mentally ill you get alot more people with that diagnosis or who are mentally ill so not so many people are disqualified from the benefit. I think the Section 8 Landlords may be waiting for the chips to fall before commenting.

This is a good concise summary.  It does illustrate how complicated our government is.   Although I do not have section 8 tenants  I don't have a problem with the expectation that people will get off section 8.   I believe our services are too fragmented and we could do a lot more for people if we didn't have so many applications for different programs Section 8, SNAP, Medicare, heat assistance, employment assistance. Having a unified system, having a timeframe for able bodied adults to leave the system makes sense, not sure 2 years makes sense.  And the reality is you can be able bodied and just not bright so you are never getting that better paying job where do we draw that line.