All Forum Posts by: Michelle Lutz

Yes, that is correct @Chris Martin. The lien is recent and was not shown on previous K-1's. The lien only came to light when the first unit was sold earlier this year. That unit did sell, Im not sure of the technical term but the title company had to get a 'paper release?' of lien from bank #2 before it could close. No, I am not out any money as of yet and I do not know if their loan is current. I am not sure what will happen as the plan is to sell off remaining units and bank #1 will be paid in full next month. 

Why don't you join us at the next BP meetup on Nov 9th?

@Greg H. I don't know? I need to look in the OA to see how meetings were scheduled right? @John Thedford property was held in LLC.

The property is in Nevada. I just got a copy of the Deed of trust. Two of the other investors signed the document as "managing members". The advice about auditing the books is very helpful. I need to do that for sure. Im looking for an unrelated real estate attorney now, the one I had been using had previously worked with the other investor and I don't trust him to be impartial. 

Thanks for your thoughts guys. The investor that took out the loan and put the property up for collateral is a broker and did collect a commission at the time of the original sale. In addition he has been charging ongoing management fees and as part of the agreement will collect 25% of the profit over 8% annual return as a carried interest holder. I do not know if the second bank did a title search before they put a lien on the property. They refused to talk to me today but aknowledged that they were familiar with the property and seemed surprised? that I was telling them I was part owner. Their only response was to go talk to this investor. Wasn't there a fiduciary responsibility to do what was best for all of the investors? This person also has a property management license and gaming license. Why risk all that for a loan? And how do I find out how much that loan is?

Thanks guys. Im going to reread the OA line by line and start looking for an independent attorney. Would the real estate commission care that their broker acted in this manner? The thought of losing my license would make me nervous. 

This is going to be long, hope it makes sense. 9.5 years ago 6 investors got together and purchased a 42 door condo complex. 3m cash was put it and a 3m loan was taken out. Rents have paid down the loan and it will be paid in full next month. Recently we sold a unit and when we went to do the title work we realized that one of the investors (a RE Broker and developer) took out a loan for a different project and put our entire project up as collateral. We now have a second lien on the property which will still be in place next month when we finish paying off the first loan. I have called the bank that put the lien on the property and they refuse to talk to me. The investor who took out the loan refuses to do anything. The operating agreement in place specifically prevents the property from being used as collateral without written consent of all members. What are my options?

I live here so I can't speak of remotely rehabbing anything in KC but @Lee Ripma has recently gone down that path. Maybe she can advise?

I have accepted a years pre-paid rent several times for commercial property tenants. Im not sure if it benefited them from a tax perspective or not and they always asked for a discount of between 3-5%. Reading this post will make me rethink that position in the future but so far I've never had any problems with it. 

Such an inspiration, thanks for sharing this deal along with all the info you gave in your podcast. Love to see KC success stories. :-)