All Forum Posts by: Wesley W.

Hi all!

I've done some searching, but haven't found something akin to "The Idiot's Guide to Presenting Your Own Offer."

I've only ever purchased/sold property using a realtor. So, if I am looking at a FSBO property for a buy-and-hold portfolio, I go to my attorney and we construct a contract.

Then, how does it get presented? Do I walk over to the owner and hand it to him? Do I mail it? Do I verbally discuss my offer with him beforehand?

I'd obviously like to have the offer presented in the way that will maximize the chance of success, so how is it done?

I know if my offer is "so low as to be insulting" the seller is obviously not motivated enough (yet!) - so how do I couch a low-ball offer to him in a non-adversarial way? Do I let him know how I came up with such a low offer? Do I provide documentation?

How is it done?

Thanks for your collective wisdom!

As I begin my investing career, I've heard more than once that one can get the "deepest discount" on an investment property if it is a cash offer.

Excuse my ignorance, but I don't understand why?

There still has to be a closing, with attorneys for each participant, right? If I'm buying a house the bank I am lending money from is going to write a check to the seller, much like I would if I am paying cash, no?

Does the lending piece delay the closing? In other words, if I am paying cash is the primary advantage the speed of closing? If so, what is the typical time difference between a mortgage closing and cash?

Thanks in advance!

Hi folks,

I've asked this question obtusely before, but I'm still not sure how to make this work.

I just finished reading Brandon Turner's blog regarding "I'm not the owner." In Brandon's article he mentions holding his properties in an LLC.

When I first started setting myself up for a RE portfolio, my wife and I - on the advice of our CPA - created an LLC.

Now, as we search for lenders to finance our first deal (duplexes, to start) - they universally tell us that we CANNOT title the property with the LLC; it must be in our own personal names despite "personally guaranteeing" the loan.

To me, this defeats the whole purpose of forming the LLC to begin with. I spoke with a mortgage broker that told me that basically I could transfer the title into the LLC after closing, but I would have to change it back in order to sell or refinance. Each time, generating additional attorney fees and closing costs.

The broker also mentioned that titling in an LLC about this creating a "commercial" closing - which my attorney says is many magnitudes more expensive - but she had to get back to me on that.

Here's an excerpt from an email from my attorney:

Mortgage lenders will allow a LLC to borrow and take title in its corporate name. It just won't be at the rate that you might get as an individual. Aside from the two (2) transactions that you are envisioning, if this is deemed a "commercial" closing", the legal fees for the same are significantly more expensive.

I'm also worried about the specter of the "due on sale clause" rearing its ugly head as interest rates climb and lenders sift through their portfolios they might see that the title was transferred, then compel us to take action.

I've heard from other investors (both on BP and locally in Upstate NY) that just keep title in their own name and just buy "Cadillac" insurance policies for each property. Again, this makes the expense of forming an LLC silly.

There must be a way. Am I talking to the wrong lenders/attornies/investors?

Thanks for your help!

I'm surprised your bank allows you to do this. So, on the 2nd you call the bank and tell them "don't take any deposits on this account until further notice" or something similar?

Hi Frank,

I found that document as well. I'm just wondering if that is the comprehensive guide or something else exists that I should know about.

Hello All!

I'm relatively new to BP and I'm staging my finances to get my first income property. In the meantime, I am trying to educate myself on the legal aspect of landlording.

I tried searching, but I can't find a resource that outlines landlord and tenant law in New York State. I'm sure someone here (or several of you) know exactly where to look online. I'd be very appreciative if you could provide a link. Even better if it explains it in non-legalese, but not reguired.

Thanks in advance for your collective wisdom!

Thanks, Michael!

I'm not quite sure I follow. When I talked to an attorney, they said an LLC would take 6-8 weeks to set up. If I were purchasing a property the "traditional" way (via realtor, offer, negotiations, closing) I would have the time, but if were to buy a property at auction - let's say - then that's not enough time. Is there any harm is setting up the LLC ahead of time before "shopping"?

Also - who needs to know (and when) that the LLC is purchasing the property, not me?

In this instance, I assume, the fees/taxes for the two transactions was worth the calculated risk? I've always heard the banks are a bit laissez faire as long as the mortgage is being paid, but this being my first venture hopefully you can understand my worry about that happening.

Thanks for the quick reply - thus our dilemma. What do we do? Surely our situation cannot be unique..

Thanks again for any help!

Greetings All!

I’m brand new to the forums as well as being brand new to the business. I’m really looking forward learning from the collective wisdom from the members of BiggerPockets; someday I hope to be able to provide the same assistance to future newbies. As I am sure many of you can relate, I have (and will have) a number of questions as I approach my first deal.

My wife and I are looking at starting our foray into real estate investing by purchasing some rental property (single family or duplex, probably) and becoming landlords.

We'd like to set up an LLC. In talking to our CPA, our understanding is that a married couple is considered one entity, so we could set up the business as "multiple members" and "disregarded" which would give us the least headaches as far as tax returns and income reporting (we currently file our personal returns jointly).

I have few questions that I would really appreciate everyone’s help with:

First - would you recommend setting up the LLC before or after buying the property? Setting it up beforehand would avoid having to do two transactions and the commensurate fees/taxes (one to buy the property personally, another to transfer it to the LLC), but I'm afraid it would create issues with financing, i.e. the bank would consider it a "commercial loan" with all of the appropriate interest rate hikes and LTV restrictions.

We both have excellent credit, and would like to finance this first deal with the equity in our home (and take advantage of the extremely low rates right now), but we're not sure how to do this with the LLC. We want to be protected, but don't want to pay those exorbitant commercial rates when we have equity to use. What do you think?

I assume many of you out there have encountered a similar problem when first starting out, so I’m hopeful you have some suggestions and advice for someone following in your footsteps.

Thank you in advance for all of your input,

Wesley

Hello all - my name is Wesley and I am from the Albany/Schenectady/Troy area in upstate NY. My wife and I are looking into purchasing some rental properties (one, to start and get our feet wet!) and would like to learn from the collective experience on these forums. I've done a lot of reading/listening on real estate investing, and as we slowly compile our team and get ready for our first deal could really use some advice from the numerous questions we have and will have!

I'm looking forward to being part of the community and beginning a successful business.