All Forum Posts by: Ryan Swan

Thanks Bill. Wheres a good place to find a boilerplate Deed of Trust? You can find some on the internet, but they're often prefilled or so grainy that they're almost unusable. Is it worth buying one like they sell at Staples?

I should mention I wanted to avoid a deed of trust and having to use a title company (for the extra cost, hassle, paperwork, etc). I know a UCC and a Deed of Trust have their own uses and intricacies, but I think for this purpose a UCC would be sufficient.

A family member loaned me money to make a property purchase at trustee sale. Their loan amount was roughly 30% of the purchase price of the property. We have a promissory note for the loan amount and I am paying them interest and principal according to an amortization schedule. I want to make sure their loan is protected via a lien on the property. I have the Form UCC1 completed and ready to file, but I'm wondering if this is all that is necessary? What other documentation might be needed?

I re-read your initial question and realized you would like to live in half of the duplex. With that in mind, I definitely would NOT plan to purchase a property in a neighborhood that you would otherwise have no interest in living in. I recently had to do an eviction a property I own and in addition to costing a ton of money in lost rent and lawyers fees, it also stressed me out a lot. Now imagine having to deal with this while living next door to the tenant. The cost to buy a property in a nicer area with generally better tenants will save your wallet and your sanity in the long run.

I agree with Greg B. Looking for your return to come from market appreciation is risky and could backfire. I think it's much smarter to play the long game and make your goal to pay off the properties as fast as possible with the intent to hold them indefinitely. If you buy rentable properties in a decent area, you are almost guaranteeing yourself cash flow forever. People need a place to live even during a recession, and rents actually went UP after the housing crash.

Let's say your property(s) are worth more in 5ish years. Assuming you've been paying the mortgages down, now you have equity you can tap through a line of credit, home equity loan, or a cash out refinance. That money will open the door to buy even MORE rental properties.

Unfortunately, there are other properties in the LLC as well. Can we just put a lien on this property in the name of the family member?

I purchased a property at trustee sale with a family member. We both chipped in cash to make the purchase. Currently, the deed is in the name of my LLC and I am the sole member. What is the best way to protect the family member's ownership interest in the property? I want the asset protection provided by an LLC, but I also want the family member's ownership interest to be well documented and protected in case something happens to me. I'd rather not use any method that shows a change of ownership, because the condo is in a HOA neighborhood and there is a $400 transfer fee.

Thanks everyone for your feedback.

Rob K - I'm in AZ and so far have not had any luck finding a bank (including Wells Fargo) that will do a HELOC on a non owner occupied investment property. I even tried my bank Chase, with whom I do a lot of business with. Is my best bet a smaller "local" bank or a credit union at this point?

Thanks, Dale. Can you be more specific about "things getting tight" and the banks cutting off the credit? In my situation, the funds available through the credit lines will more than cover the purchase, renovation, and holding costs, so I'm not especially worried about "maxing out" the lines of credit.

I have three rental properties each with a high amount of equity that I plan to tap with HELOCs (both as a source of funding and for the equity stripping asset protection). I'm analyzing some potential flips on the side and realized I'd have more than enough cash through the lines of credit to fund the purchase(s). This seems like a much easier route than hard money lending (no hoops to jump through), and also has a much lower interest rate (around 4.25% on the lines). I know that the interest rate on helocs is variable, but I don't expect it to skyrocket during a short holding period of <6 months for a flip. Are there any other pros/cons that I'm missing here? Is this a common funding strategy?