All Forum Posts by: Michael Badin

@Brian Eastman

@Carl Fischer

Thanks.  this was just a hypothetical.  I do not currently have a deal in the works, trying to make sure I understand everything first.  In the process of starting a few courses to up my education level on the subject.  I appreciate the info and will look into the cases you mentioned.  thanks again, great info!

@Carl Fischer 

@Travis Sperr stated that: "...you can not personally benefit from your IRA, nor can your IRA benefit from you..."

And @Carl Fischer stated "...A prohibited person is you, your spouse, your family that is linear to you (Mother, Father, GrandParents, children). A prohibited "person" is also a business/entity you own 50% or more of..."

So If I understand you correctly then if I was to become a syndicator (something I am researching) and was to do a deal but I personally owned less than 50% of the LLC or LP or whatever form was used, than my SDIRA could actually be part of the syndicate? Is that correct? So if my company that I own less than 50% in is not a prohibited person then would other normally prohibited family members be able to loan to it as well?

Carl, If I am completely off base here please let me know.

Welcome to BP!  You are correct there is a wealth of information and seasoned investors here willing to help others.  It is a great community.

@Account Closed Yes.  If the property is free and clear without a mortgage company but has homeowners insurance then the insurance company would pay all insured's listed on the policy.  If this is say for example a husband and wife both names would be listed.  If the policy only has one name then it would only have the single name.  Now if the property had a mortgage and you paid it off but did not notify the insurance company the mortgage company would still be listed on the payment until the insurance company received proof that the mortgage had been paid off and that no other mortgage exists on the property.

@John Mocker   I am sorry to tell you but you are incorrect.  Additional insured's have nothing to do with liability. Additional insureds are in fact insureds on the insurance policy. By law all insureds must be included on all first-party claims. I issue these claim payments every single day at work. I am not confusing loss payee with additional insured. All additional insureds are in fact loss payees on first-party claims.  Liability claims are third party claims and do not deal with payments to the insured but rather a third party claimant. You are correct that a mortgagee is an additional insured. And as an additional insured a mortgagee is included on all claim checks for the property they are considered an additional insured. On a homeowner's policy a mortgage company is considered an additional insured for the dwelling but not an additional insured for the personal property.

There are many things on this forum that I am not well educated on yet. I am working on educating myself in many areas of Real Estate. However I have over 14 years experience with this and I am not confused on it. I deal with it every day.

@Frank Chin  I agree with you that there should be a way to track for landlords. Unfortunately as of right now I know of no way to do that. (At least not legally.)  I also agree with you about tenant fraud, claiming damages that never existed. It is a big problem. My suggestion would be to include the insurance clause of recommending or requiring renters insurance.  Have them sign an attestation that they understand that all personal property is not covered by the landlord policy. You then include another clause (worded better by your attorney) stating that if the tenant sues you and is found to be in the wrong then any and all costs associated with your defense is paid by the tenant. This could include attorney fees, court costs, lost wages for time lost at your day job, etc. If your tenant tries to sue you for a personal property insurance claim then you can show them where they signed acknowledging that they knew they were responsible to get their own insurance and that your insurance does not cover them. Then show them the legal clause and perhaps they will come to their senses and drop their suit.

Sorry for the long post everyone.

@Frank Chin You are correct that having them place you as an additional insured will keep you notified if the policy is canceled or not.   However there is a problem with your strategy.  I have been an insurance adjuster for over 14 years so I have some experience with this. The problem with that strategy is that what you are actually doing is making your tenants give you part ownership in all of their personal belongings (as far as the insurance company is concerned.)  If you don't have any ownership in the personal belongings of your tenants it is fraud to have you listed as an additional insured.  It is against the law to have insurance on any property you do not have an insurable interest in.  If one of your tenants was to ever have a claim the check they are issued would include your name on it.  That means you have a right to some of the funds.  That is fraud.  If the insurance company was to find out they could actually deny the claim based on the fact that you are on the policy, if they wanted to be real strict they could prosecute and you could do jail time.  Now I don't think that is a likely outcome for you but it is within the law and is a real possibility which is why I will not be using the strategy.  

Put your mind to it and you can do anything.  With that said I believe it would be a difficult business plan.  As an insurance adjuster I have dealt with many home fires.  Usually with a large fire that damages the entire property the borrower (home owner) does not actually get the funds.  The funds are issued to both the borrower and the mortgage company.  To avoid the issue of people just taking the money and walking away the mortgage company will then keep the funds and release them bit by bit as the repairs are completed.  They will send out inspectors to make sure the repairs are completed.  Bare in mind this is not always the case, it depends on the mortgage company and their internal procedures but normally with a large fire and a lot of damage that is the way it is done.

I have used several, Cozy being the current one.  The best part is it's free.  The negative is it's slow.  however, if you and your tenants know this going into it then you can plan accordingly.  Once they submit their payment it usually takes 4-6 business days for it to post to your account.  Have your tenant submit their payment that far in advance of the due date and everything will be fine.

I spell out in my lease that NOTHING owned by the tenant is coved by the Landlords insurance.  It also "recommends" that they obtain renters insurance so that they are covered.  I know there is no way for me to track who keeps their insurance after they get it unless I require them to provide me a copy of their renewal policy every time it renews.  That would be a big hassle.  I have them initial in the lease next to the section explaining about the insurance, indicating that they understand that their property is not covered and that they should get their own insurance.  If they don't it's on them.  I haven't had a problem yet.  (Yet... hopefully never).  I also have a ton of liability insurance coverage to be on the safe side.

If the wall you are removing is structural you will need to have plans drawn up by a structural engineer or an architect.  The plans will detail exactly what type/ size beam you need to use.  This will be required by your local municipality.  Go into the municipal office to pull the permit and they can probably give you some names of people if you don't have one.  Many counties/ cities require the contractor you use to be registered with them to do the work.  I don't recommend removing a structural wall yourself unless you have some construction experience.  A non-structural wall is a much simpler project that could be handled by someone with little experience.