All Forum Posts by: Nikki O.

Hi, I am the buyer with cash payment under the current terms (no conventional financing option). With the pandemic and my personal finances deeply impacted I may no longer have the means to pay for the house in cash. I would have to opt out onto conventional financing which will not only be breaching the contract but also take 60 days to close. I understand this "change of payment method" is frowned upon in the industry but given the current circumstance I am wondering how many people are having to go through similar situation? Let's say, even if the seller has a backup offer from another buyer s/he would have to have cold cash or go with the financing etc, so wouldn't it make sense for the seller to work with us rather than starting new with another buyer? If you could share your insights that would be much appreciated. 

@Josue Vargas

That’s the dumbest thing you can ever do. Hond onto your account or move in over to the existing 401k. If your 401k is vulnerable RE business is just as volatile if not more.

Dear fellow investors,

My post comes in part 1 and part 2; the efficacy of the LLC protection, the other to address the setting up an irrevocable trust in a community property state.

1. Questioning the level of protection by LLC

My husband and I have lived in greater Los Angeles area for 10 years with modest assets worth protecting from creditors. We have recently established LLC, subsequently purchased an investment property in the state of New York but because of LLC being relatively new my husband had to guarantee the loan to finance the property. My name is not on the legal contract with the property. We are concerned about our liability and being sued beyond coverage of an umbrella policy.

Since the financial aspect has his personal name and his line of credit does that pierce the veil of asset protection by LLC? CA has homestead law that protects up to only $100k!(ridiculously low).

Upon further research, I learned that putting the property in LLC means more tax, more insurance, sometimes as much as 3 times. Why go through the additional expense  if it doesn't provide the asset protection. There may be a further due to find out if he can transfer the property title to LLC once the property is paid off (The repayment plan is in 3 years or less) or have it transferred to LLC once the company has had the sufficient time to establish its credit but that would of course mean that we would have to pay for underwriting twice.

If there is a blindside to this I am not aware of please freely share your thoughts.

2. Establishing Trust in community property state( Irrevocable vs. Revocable )

California is a community property state so even if the investment properties are located in common law state, the law of the primary residence still applies. That said, if my husband were to fund the trust with all of his personal assets like our house and make me the beneficiary would that really serve any benefit? On further note, if we are able to have our daughter who is 19 years old, be the settlor, trustee, beneficiary of the trust account? would that protect our assets any differently when I pass away and I were to leave a ton of debt in either of our name? She is a step daughter to my husband.

I am also not completely familiar with the difference in the irrevocable vs. revocable trust and how each one has its pros and cons. It feels like it's time to start calling some estate planning lawyers.

Sharing of any personal experiences or insights would be greatly appreciated. Thanks for reading thus far and more to come soon on this highly debatable topic. 

JNS

I am about to put together a competitive offer for a multifamily around $400k in college town with over 9% cap rate, however so far I do not have a buyer's agent at this point. 

The agent admitted that she gets 6 for representing both sides. That's $24000, as opposed to $12000 at 3%, a significant difference in most people's mind.

She has other offers coming from parties she also dual represents, so if I come in with my own agent my offer will mean her commission will be reduced to half. Even if my offer might come in higher than other offers I am worried that she is going to present more favorably offers that give her 6% over mine that will give her 3%, not only that I would be better informed.

Thanks and Merry Xmas. 

Dear all, I am looking to invest in an apartment complex between 5 units to maybe low teens (13,14) near a college campus under $600k. LoopNet has some inventory, but as mentioned in other forums I would rather get it hot out of oven. Any pointers, ladies and gentleman? Thank you so much and looking forward to your feedback.

If I am not building ADU my down payment will be more like $80k for a starter, but that amount will hardly be enough to get me a multiple units let alone a single condominium in SoCal.

I have also entertained working with a partner to increase my capital but a partnership with a stranger sounds like more risk than I can bargain for. 

So where should I put my money? I have been looking for pockets with rank 8+ schools,  Lancaster, Palmdale, Riverside, Glendora under $250k (25%-30% down)SoCal market. What other qualities in the city or indicators should I be looking for in the city with growth potential? 

The out of the state market as the next “pot of gold”; What are the cities in or out of CA that seem intact from market crash and still affordable for a small timer like me? If so I would surely appreciate a pointer. 

We own a home in middle class neighborhood in a quiet residential neighborhood Los Angeles with a decent school district. Our lot size is about 6500 sq. ft., with a detached garage space which we are considering to covert to an ADU rental unit for extra income. We are going to be having a baby in 1.5 year and we would like to use the rental income so I can be home with the baby. We should preface it to say the home is near two small colleges, Google campus and near the shopping center (includes T-Joe).

This ADU will cost about $100k to $150K(cash) 400 sq. ft., from start to finish on the existing structure. I can rent out the unit for $1700 to $2200 a month which pays more than 60% of my mortgage, but I have so many questions that only gets me too scared to make the next move.

1. My concern is what affects having the ADU will have on my home's resell value 10 years from now. In my neighborhood where homes are listed between $900k for a tiny fixer-upper to $1.8 for a decent size turnkey, I have seen smaller homes are so hot, high in demand by first time buyers where as larger homes go stagnant due to the higher pricing (due to the sq. ft. not because of the location)and targeting smaller audience group who can afford that higher price point. I have watched homes listed for $1.7m reduced down to $1.5 to sell. Home that sits on the market has to compromise in the sale price-that's the bottom line.
2. To the contrary, one can argue that having the rental income is going to entice those first time buyers who may otherwise be priced out of that range but if I were a buyer I would first start to wonder how hard it is to keep the unit occupied throughout the year? Then my second question is the issue of privacy. I may even ask "Am I a chill, laid back landlord who is cool with living with a stranger?" How many of you would actually rather have a small fixer-upper than a large home where you have to share the space with a tenant?
3. The alternative is to take that money and invest it in areas like Riverside, Inland Empire, Modesto etc, but that would require another loan and the money is getting more expensive as we know it. 
4. The last option is to invest in another state, but this idea seems far fetched and risky especially that I am going to be home-bound with my baby. But if I were to do it I wouldn't want to leave the west coast.

At the end of the day, there is no risk free investment. Can all of you real estate experts shed some light on my dilemma. I would surely appreciate it.