All Forum Posts by: Corey Demuth

Dale, I have heard several people say that lenders will allow you to buy property in an LLC once you have "a relationship" with the lender. However, every lender I have asked about this has stalwartly denied it.

Are you talking about commercial loans, or residential loans?

Pulling your own credit is a "soft" inquiry to clarify this a bit. So no matter where you pull it, you shouldn't impact your score. But there is another issue here... not all "scores" are created equal... you need to check the score that banks are actually using, for the product you are trying to get. For a mortgage, they're pulling the big 3 (Experian, Equifax, and TransUnion.) For a loan or credit card, typically they only pull one of the three.

Guys, let's be honest. 90% of people don't end up doing it because they can't put together the capital and/or credit and no one will loan them the money to fund a deal.

If it was easy, everyone would do it, profit would approach zero, and we'd all have to go find some other way to make money.

Remember this when you're advocating hard for easier loan qualifications and no money down deals, etc... don't bite the entry barrier that feeds you.

I am not aware of obesity being a protected class... Steven do you have any evidence of this?

The problem is everyone either focuses on whether or not an LLC provides better protection that insurance, OR how difficult it is to do everything via an LLC, but it's rare that there is a discussion on here with addresses BOTH issues.

There have been numerous cases recently, where investors have received a due on sale notification from their mortgage bank as a result of quit-claiming the deed from their name to an LLC. So be aware, that can happen.

I found that while creating an LLC isn't that complicated, getting financing through one IS VERY COMPLICATED. I talked to about a dozen banks and they all refuse to allow this unless you do a commercial loan. That means crappy interest rate, shorter terms, shorter amortization, higher closing costs, etc... you will eat a large portion out of your profit by these factors alone. And, you will be 100% vulnerable to the mercy of the prime rate, since commercial loans typically have to be re-written or refinanced EVERY 5 YEARS.

Insuring the property when it is in an LLC gets trickier and more expensive as well.

I think the bigger issue about LLCs, is not whether or not they provide additional protection - it's whether or not they are even practical to use for real estate investment.

If you're going to buy everything with cash then a lot of the complications go away (insurance is still expensive though.) However, remember that if you don't use the extra leverage of a mortgage, your actual profit/return on your investments will be dramatically lower...

Some wholesalers might suggest that you try to pay them a smaller amount for an "option" contract giving you the exclusive right to buy the property for the next X number of days.

Thanks, I will check with them.

Any others?

How are you planning to come up with the down payment? Are you do a conventional loan, FHA, some other type of financing?

Is this a for sale by owner, or is it the realtor who is asking for the $1000 earnest money? In NJ this is a common request, but it's usually the realtor asking for it. I know investors who have refused to pay it and still closed deals, but they had very strong financials showing they could close.

I need a good contractor in Queens, NY. Can anyone recommend someone to me? Must be legitimate, insured, etc. Also, I want someone who is actually going to do the work, not someone who is going to sub the work out to others.

Thanks!

Can anyone recommend a good landlord insurance provider for small to medium multi-family (2-4 units) properties in upstate NY?