All Forum Posts by: Matthew McNeil

I think it’s fair to say that many of us reach a place while expanding our portfolio when we hit a plateau. We’re not sure which direction to take.  Or we may be stuck trying to decide if we should take any direction at all beyond what's familiar to us. 

Seeking the advice of a mentor seems to be the catalyst for elevating us to the next level.

For those who have used a mentor, can you name one thing he or she advised that really got your attention and helped you achieve something you could not have otherwise accomplished.

Thanks!

Many years ago, my wife and I were given an opportunity that exceeded our knowledge and experience that involved acquiring a SFH, which we bought at under market value. After it tripled in price a few years later, we decided to walk through a 1031 Exchange. However, we didn't know where to reinvest. We spent weeks researching the pros and cons for real estate investing in the three northwestern states; Oregon, Washington, and Idaho. It became abundantly evident that Idaho was the very clear winner, and Boise/Meridian came out as the best overall for the state. That was 12 years ago and we keep expanding our portfolio in the area. And, we've done it all as long distance investors from SE Asia where we serve impoverished families in our clinic.

Boise/Meridian Idaho

My Idaho real estate agent tells me that one of his largest clientele are people cashing out of Washington's west coast areas looking to reinvest in Idaho. They're tired of these things happening. 

I think you’ll find that $100/door is the baseline goal. I’m earning between $600-$800/door. Larger down payments though. High appreciating west coast market. 

@Ricardo R., @Guy Gimenez,
@Ralph R.

As the OP I’ll chime back in here. I appreciate all the comments. The premise of my post came after my PM, which I’ve used for 10 years, suddenly required me to include his company as “additionally insured.” I thought this was somewhat extraordinary assuming he was passing liability on to me. However, I’ve come to understand that its actually beneficial to me and I’ll quote @Robert Gilstrap who commented on a similar post a few years ago that I found here on BP;

If the PM is listed as additional insured then the insurance company must defend both of you in court on the liability claim. If you didn't have that in place what's going to happen? Well your PM will come to you seeking coverage for his defense expenses because I can assure you that in your mgmt agreement you have agreed to indemnify the PM against any claims. It costs you nothing to add an additional insured and you should absolutely do it.

Thanks for all your input and comments. 

Remember the old ad campaign with the slogan, “When E.F. Hutton talks, people listen.”
Anytime these guys post I always, always pay attention. Genuinely appreciate your wisdom and insight. Thank you!
@Jay Hinrichs @JD Martin @Mike Dymski @Jerry W @Mike Dymski @Russell Brazil @Dave Foster @Joe Splitrock @Steve Vaughan @Ned Carey

If you take out a mortgage personally and transfer the property to your LLC that you control, you should be exempt. Also, if your loan was conventional; Fannie Mae recognizes the legitimacy of a QC between the mortgage holders and the LLC so long as the LLC is controlled by the borrowers; If the property was owned prior to closing by a limited liability corporation (LLC) that is majority-owned or controlled by the borrower(s), the time it was held by the LLC may be counted towards meeting the borrower’s six-month ownership requirement. (In order to close the refinance transaction, ownership must be transferred out of the LLC and into the name of the individual borrower(s). See for additional details.)

@Nathan Shankles

Yes, I've done it several times. However, a few things to consider first. The lender can exercise the "due on sale" clause if the name(s) of the buyer are not the same name(s) as the members identified as the owners of the LLC. For clarity; as with a trust, lenders do not exercise the "due on transfer/sale" clause when real property is transferred to the SAME individuals in an official capacity (e.g. Joe and Jane Smith as trustees of Smith Trust). Typically, the same applies to LLCs where you and your spouse are sole members (single or multiple member LLC).

If you take out a mortgage personally and transfer the property to your LLC that you control, you should be exempt. Also, if your loan was conventional; Fannie Mae recognizes the legitimacy of a QC between the mortgage holders and the LLC so long as the LLC is controlled by the borrowers;

If the property was owned prior to closing by a limited liability corporation (LLC) that is majority-owned or controlled by the borrower(s), the time it was held by the LLC may be counted towards meeting the borrower’s six-month ownership requirement. (In order to close the refinance transaction, ownership must be transferred out of the LLC and into the name of the individual borrower(s). See for additional details.)

I believe Freddie Mac follows suit. Here’s a BP post on the same topic;

Regardless, you should always talk to your lender and tell them exactly what you’re planning and get their approval.

Next is to check with the Title Company regarding the Title insurance. Generally, the coverage of the policy will state; “The coverage of this policy shall continue in force as of Date of Policy in favor of an Insured after acquisition of the Title by an Insured or after conveyance by an Insured, but only so long as the Insured retains an estate or interest in the Land, or holds an obligation secured by a purchase money Mortgage given by a purchaser from the Insured, or only so long as the Insured shall have liability by reason of warranties in any transfer or conveyance of the Title.” Again, as with the question regarding the lender mentioned above, its best to ask your Title company if the insurance coverage remains intact if the asset is transferred.

I am not a lawyer and this is not professional advice.

Have you thought about buying in your name then transferring to the LLC?