All Forum Posts by: Matthew Radniecki

@David M. My experience with helocs is the same as yours. Market could tank tomorrow and the value market value of my assets cut in half. I’d still have full access to the heloc until it’s maturity.

I'm with @Preston Porter. The heloc seems like the simplest and easiest depending on what you have geared up for that cash. If it's simply just to have liquidity then why pay interest on it, let it sit un-drawn. And you mentioned closing costs being a deterrent in the Heloc option... consider shopping lenders.... I paid less than $300 in fees on my heloc. Lender waived much of the other fees (like appraisal) so long as I keep the heloc open for at least 3 years. 

@Alexander Kleyman -

I recently had same question as you and also consulted the forums and got nervous reading the responses there. Yet never found anyone that had their loan called. So I consulted an attorney that I know (whom is well versed in RE ) and he said the same thing basically as yours.

His exact words were “I would deed into llc post closing and not worry about corp veil and/or due on sale clause in mortgage – people do all the time”

@Mark Ross

Mark - I’m curious how your experience with Madison has gone since this post.

Seriously, spend the money and buy both Tax Strategies for the Savvy Real Estate Investor  AND Advanced Tax Strategies for the Savvy Real Estate Investor..   The books won't replace the services of a great CPA, but they both educate you enough to have a meaningful conversation with your CPA, and can answer some of the questions you have. Both books are in the BiggerPockets bookstore

Apologies if this was already mentioned in the thread.

Have you considering structuring so that some of your partner’s contributions are not equity-based but debt?

For easy example.... let’s say you two are going to buy and rehab a property in which acquisition and rehabs costs total $100k. Instead you putting in $10k for 10% and him $90k for 90%.... you put in $10k for 50% and he puts in $10k for 50%. Then his additional $80k is a loan to the corporation at specified terms. And your hours spent also carry an hourly rate.

So after the flip sells or brrrr refi’s, his $80k is paid back with interest and your hours spent are paid. What’s left after that is split 50/50.

@Misael Carlos Vera

I just bought my first multi-family property and we acquired personally so that we could get solid conventional financing terms (30yrs, 2.875%). Then after closing, we quick claim deeded the property into an LLC. Our lender suggested and approved of this. But we have to close initially with the property in our name so that the loan complies with secondary market regs.

While Christopher Smith is probably right, good insurance is better than any LLC.

I opt for both. Solid insurance and the protection of an LLC to keep my personal assets separated.