All Forum Posts by: Michael Wolffs

Michael, that was the info I was looking for.  Thanks.

For a lot of years, Texas was a hot multifamily market. Much of that activity was driven by the oil boom. But a year or two ago, the Saudis popped that bubble. Oil prices have come back a little since then, but not nearly to where they were.

How has this effected the multifamily market?  Have prices come down at all?  It looked like an interesting market, but one that was at the top of the cycle, so not good to by into at the time.  Has that changed at all?

Dave,

That's what I was looking for, but not what I want to hear.

Thanks

Situation: I own a three family house, fully rented, through an LLC. I'm the sole member. The LLC didn't take any debt to find the purchase or rehab. I have some personal LOCs I've used, plus significant cash. I have approximately $560K in the project. By comps I've gotten from a realtor I've worked with, the current value of the property is about $800K. If I sell out, I'll get all the cash, minus transaction costs, so likely >$700K.

Let's say I do sell out of this, and buy a $1.2 million dollar property on a 75% LTV mortgage. I'd need $300K + transaction costs. What can I do with the other $300K+ proceeds from the first sale. Is this trapped in the exchange? What happens if the total transaction of the purchase is greater than the sale, but the cash in of the purchase is less than the cash out of the sale?

Just got off the phone with the JC City Clerk's office.  If you have an 1 or 2 family rental, you need to register it with the city.  3 or more, you need to register it with the state.  Of course, if you have a 5 unit or more property, you need to register it with their rent control people (Office of Landlord Tenant Relations.)  So 3 or 4, you just deal with the state.

Alex,

Look at the address on the form, it's not JC, it's the state. I believe that's the Green Card registration I mentioned originally.  I may give the clerk's office a call to see if there is anything in addition to the green card which is necessary.

Is it a myth that the LLC structure provides liability protection? If someone takes a header on my investment property, I don't want them to be able to go after me personally.

The only issue I have with being in the LLC is that the banks seem have a problem with it. Given that we're talking about secured loans, I'm not getting why.

Yes, the fact that the property is owned under an LLC has been a major complicating factor. I'm not averse to a personal guarantee. I want the LLC for liability protection.

However, it was my understanding going into this project that most investors owned their properties under LLCs. I must have been wrong about this.  Also, this isn't a pro-form situation.  The property has been renovated, rented, and is strongly cash flow positive.  I really don't see why banks have an issue with this.  The other complicating factor is this is a cash out loan (I already own the property free and clear.)  But the banks down seem to like this either.  I'm finding this whole situation completely bassackwards.

Thanks,

I'll check with my lawyer.

That's very interesting.  

Now this is a NY based mortgage broker, setting up a loan for a property in NJ, owned by an LLC formed in NJ. I have no idea yet where the lender is based.

Under who's laws (which state or is it federal), is this illegal?  I may have to email my lawyer about this.