All Forum Posts by: Ryan Seib

New LLC for each new partnership with a new partner. Or other entity type. Do not leave them hanging though.

Best wishes with it. 

Re-zoning is a difficult process. And, it is involved. But overall you should be able to predict the likelihood of success pretty easily before engaging in it. How you ask? Simply ask the zoning staff whether they will recommend your project to the zoning board or not. I would guess in 90%+ of zoning cases the municipal boards will agree with their professional staff. There are exceptions and every municipality in every county and state is different, usually composed of a collection of municipal executive appointments and interested citizens. But the upside is the zoning staff can tell you that as well. Just ask them (1) will you recommend my project, and (2) is the board and council likely to approve it?
That said you cannot drop the ball on the extensive process that follows once you decide to go for it. And I would always recommend getting a purchase contingency for re-zone approval rather than buying first and possibly ending up with a no like Mr. Wang's story illustrates above. Thanks for that Mr. Wang.
I hope this is useful and best wishes with it.

One important thing is to remember to agree on a buy-sell ie "exit strategy" with everyone ahead of time. When life circumstances change that is absolutely going to come into play, even if its just a default people can ignore, they know it is there to keep things honest. You know what I mean? So yes an operating agreement and so on. But the buy-sell provisions are key. Best wishes!

Good afternoon,

Municipalities in WI can regulate STRs. However there are limitations:

https://www.wisbar.org/NewsPub...

Lake Associations are less likely to have this ability. Most of them are voluntary. The only way they have authority is generally if the association is somehow mentioned on your deed or as a restrictive covenant on the title for the property. So you can check your title insurance documents to see. Ask the title company for copies of any such restrictions. Then read through them. I hope that helps. Best wishes.

Quote from @Barrett Bridgewater:

@Ryan Seib you would be surprised.  It is mostly about elevations.  Just imagine if you live on a 100 foot cliff next to a river then you would never flood.  Same concept applies no matter where you are.  It could be a matter of inches that reclassifies the property out of the high-risk flood zone... which would remove lender requirements.

Oh, yes of course, well that makes sense. I am aware the elevations can cause a single lot to fall in multiple zones. Generally I would assume you would have to either raise the floor level of the structure, or berm it or something in order to flip the classification. The other way I am aware of is by commissioning a flood study. But the second method likely only works on zones that were not surveyed recently. Ie you would need to bring new or better information or something. If you have a way to get elevations changed efficiently without removing or raising a structure, that would be an excellent resource as well. Thanks again.

Good afternoon, just make sure the business has a bank account and you do bookkeeping for all expenses. Any business expense with a few exceptions (rules about entertainment and meals for example) should be a deduction. Tax filers stay up on all the details of specific expenses and whether they are deductible. Here is one of many resources that discuss the basics: https://myonlineaccountant.co/...

Good afternoon, I agree that you only need to collateralize if the lender requires it. You can wait to offer that option to the lender. They might not even need it. If they do then you can negotiate better not having offered it from the beginning. As far as whether to do it, I do not see a problem if it makes business sense with your dscr, cash flow and so on. Keep your equity position reasonable and cash flow high for a recession period. 

Quote from @Barrett Bridgewater:

@David Lemont What if the flood zone designation could be removed off that SFH with a pool? That would remove the lender requirement to purchase flood, then you could decide if flood insurance is needed or not.

When you run into flood zone properties, we can provide a free review of it and let you know if petitioning FEMA for a removal of the flood designation is possible.

If it does qualify, then you may have found an incredible deal!  Why?  Because you could buy it at the devalued flood zone price, then flip the flood designation, and now you have gained property value the current owner didn't know was possible.

Happy hunting!

Good evening Barrett, I am all ears on how one goes about flipping the flood designation. That would be very interesting.
I am assuming it is impossible though with waterfront property right on the river. Thanks for your wisdom on this.

Good morning, just be aware title companies will not give you legal advice. Even with lawyers on staff they will disclaim representing you. I would probably use a title company myself but I do not have any legal questions. So I would suggest an attorney who asks a few questions about the situation and then drafts the Quitclaim deed. An estate planning attorney might even be good since they can do your will at the same time. Plenty of good attorneys do this sort of bread and butter work. I hope that is useful. 

Quote from @Tom Gimer:

Quote from @Ryan Seib:

That would be interesting if title companies moved to a business model of providing future coverage, like car or home insurance. Just like car insurance they would have to underwrite the buyer a lot more, and have them reapply for title insurance regularly. I suspect that model was rejected by the market for good reasons.

The lawyer should have read the title policy or done a little research. Frivolous suit bringers are supposed to be punished.

Thanks for the write up on this.

Many insurers do offer coverage for post-policy risks. Things that come up after settlement such as forgery, building permit issues, etc. It’s called enhanced coverage (each insurer may have a different branded name) and the premiums are approximately 20% higher.  Unfortunately it is not available for investors… homeowners only. At least that’s how it works over here on the east coast. 

That is a good point Tom. Yeah they are starting to do that here a bit as well. I believe they call it "Homeowners Endorsement" but it gets marketed different ways: https://www.virtualunderwriter...

My experience is that is fairly new here and adds a nice premium to underwriting. But I think the claims it covers are fairly narrow so that it remains profitable. I doubt it would cover anything like the situation from that case.