All Forum Posts by: Rob Beland

@Ashley Chrisstart with figuring out your net worth. Figure out how much all of your real estate is worth and deduct your mortgages. Then add in all of your money you have in the bank + 401K and other investments. Then estimate the value of your other assets like your car/truck, boat, other big ticket items. 

That's basically your net worth. Now get enough liability insurance to cover that amount. If you don't have it they can't sue you for it. If your net worth is $150K and somebody sues you for $1M where are they going to get the money? You may have real estate worth $1M but when you factor in the mortgages that have to be paid off you are left with a small percentage in many cases. This is assuming you don't own millions of dollars worth of real estate with no mortgages in which case you should be cashing out your equity and buying more properties. 

In any case, call a local agent and explain your situation and what you are looking for. Don't over complicate it with personal umbrellas vs. commercial umbrella policies. Your agent will speak with a few different providers and come back with a couple options for you. 

Good luck. 

I see a lot of posts about where to go for loans for commercial properties and questions about having too many mortgages and lots of people with questionable credit but good experience, lots of capital, etc...

My question is how many of you are not with a local bank at this time? If you're with BofA or one of the other big banks you're basically just a number to them. Who do you have your personal checking account with? Do you have a local credit union?

Why aren't more people signing up with a local bank that can do portfolio loans, has a commercial lending department and they know who you are when you walk in the front door? 

If you need financing, go to your local bank and ask to see the head of commercial lending. Sit down with them and explain your situation. You're now a face and not a number. Start a relationship with them. Move your savings account over, open a CD. Get to know the people at the bank. Give them a reason to invest in you and lend you money.

Good luck investors...

Talk to a local bank @Peter Lee with a commercial lending department. You will likely be able to speak with the underwrite directly and explain your situation. Who do you bank with now? Start there unless its BofA or some other national bank. To them you are just a  number. 

Good luck.

You might want to contact the EPA @Weikang Chen to see if they have been notified of the leak. In many states/jurisdictions a leaking oil tank must be reported (it may even be a federal law, I'm not sure). The cleanup cost could be in the tens of thousands of dollars (or more). There was a recent case in my hometown where an abandoned property was taken over by the city and then it was determined that an underground oil tank had contaminated an adjacent property. The cleanup was over $100K and the city was required to do the cleanup.

There is website called thumbtack.com where contractors do just that. Look it up @Dinesh T.

Many of you are missing some very important points with this case. The first and one of the most important is that this has nothing to do with a property management company. Rick Warren is the manager of an LLC of which he is also a member. He wasn't claiming to be a property manager. The distinction is that (in many cases) an LLC with have a manager that will oversee the day-to-day operations of the LLC but does not have a financial interest (not an owner). In this case Warren is both a manager and a member. Warren's defense was that he did not personally own the properties, the LLC owns them.

As far as the Olmstead case, that really has nothing to do with this situation. That case is about creditors getting money from the members (owners of an LLC). It doesn't matter what state you are in when it comes to certain areas of the law, the LLC will not protect you. A few of them are negligence, fraudulent activities that cause to somebody or something, and some specific violations of the tax code.

Warren was found guilty of owning or operating a vacant, open and unsecured building. He owns the buildings. It's his LLC. Now he's going to jail. This is the perfect example of why an LLC will not protect you from a lawsuit.

Every day new members here on BP start googling "piercing the corporate veil" and they post about how to set up their LLC and they talk about their LLCs having children and creating more LLCs. Then they set up an LLC to oversee the management of properties they don't own yet and they set up 16 bank accounts. As one commenter above pointed out, an LLC can't go to jail. I hate to continue this LLC debate but it's pretty clear that 90+% of people here spend way too much money on LLCs with false hopes of protecting themselves and/or their assets (and most really have no assets to protect anyways) because they read Rich Dad Poor Dad or any of a number of gurus books that bring nothing of value for the real estate investment business.

Interesting thread though....

@Shaun Reilly I did misspeak (if thats a word). In the case of a residential lease the security deposit must be held in an interest-bearing account. Commercial security deposits do not have the same requirement. 

@Chan K.@Rich N.you can have one account for all of your security deposits as long as it is separate from your operating account. It needs to be set up properly so that its not considered an asset of yours. Having multiple security deposits in one account is fine but you need to do some math to figure out the interest you pay each time somebody moves out and you have to refund the deposit with interest. The easy thing is to put the money in a non-interest bearing account. Either way as Chan said I skip the security deposit altogether and make sure I screen my tenants. 

A little off topic but in MA there is no law that states an "owner" of an LLC can't represent themself in housing court. What exists is prior case law (precedent) where housing court judges are actively throwing out eviction cases when an attorney is not representing the LLC in court. The reason is that the landlord/manager of LLC wants to separate himself personally from the LLC with respect to liability but wants to be personally involved in the eviction. You cant have it both ways. The courts are requiring professional representation to ensure the landlord is truly separated from the entity. @Chan K. @Rich N.

Banks will likely require you to have had the down payment money in the bank for at least 60 days (seasoning period). Also just make sure that you can find a property that will cash flow at 100% financing. Lastly, the bank will likely have you sign a document that says there is no other financing in place in connection with the purchase. They could call the loan if your employer records a mortgage on the property and the bank finds out (highly unlikely).