All Forum Posts by: Joe Boggin

my mothered transferred the deed from her primary residence to my two brothers and myself.  the note is being paid for by my mother.  my brothers and myself are not on the loan...just the title.  

my one brother is in the process of purchasing a home and his lender told him to have his named removed from the deed to my mothers house.  event hough he is not on the note, he is on the hook for the real estate taxes and insurance, which i believe throws off his ratios.  funny thing is he is on the hook for all of the real estate taxes and all the insurance, which im guessing my other brother and myself would be as well?!? in a lenders eyes, if something were to happen to two of us three, the third one would be responsible for covering all the taxes and insurance.  

is this the norm with lenders?  do lenders normally do a search to see if the applicant has their name on a deed in some county record book?  

another unrelated but somewhat related question... if i own three rental properties free and clear and decide at some point i want to move from my primary residence across town to a different house, would the above situation (taxes/insurance be used as debt to effect my ratios) be avoided if my rental properties were in the name of an LLC and not my personal name?

my mothered transferred the deed from her primary residence to my two brothers and myself.  the note is being paid for by my mother.  my brothers and myself are not on the loan...just the title.  

my one brother is in the process of purchasing a home and his lender told him to have his named removed from the deed to my mothers house.  event hough he is not on the note, he is on the hook for the real estate taxes and insurance, which i believe throws off his ratios.  funny thing is he is on the hook for all of the real estate taxes and all the insurance, which im guessing my other brother and myself would be as well?!? in a lenders eyes, if something were to happen to two of us three, the third one would be responsible for covering all the taxes and insurance.  

is this the norm with lenders?  do lenders normally do a search to see if the applicant has their name on a deed in some county record book?  

another unrelated but somewhat related question... if i own three rental properties free and clear and decide at some point i want to move from my primary residence across town to a different house, would the above situation (taxes/insurance be used as debt to effect my ratios) be avoided if my rental properties were in the name of an LLC and not my personal name?

anybody in the phila area that knows of a company that will write a policy for my rental?  im looking for a basic fire/liability policy.  i will get an umbrella with liberty mutual.  they handle my primary residence and my vehicle in new jersey but wont touch my rental in phily (its old and has a flat roof!) but in order to get my umbrella with Liberty Mutual i need a home owners policy on the rentals.  sort of like a first line of defense before an umbrella kicks in. something basic with just 100k liability is all Liberty Mutual needs to write a 1mil liability.  thoughts?

after much research about LLCs and rental properties and umbrella policies I know the extremely conservative approach is to have each rental property in its own LLC. Assuming one was to do that with rental properties that have been purchased recently but are in one persons name, there needs to be a transfer

Philadelphia charges transfer tax 4% of the county assessed value or 4% of the purchase price. I own two properties and I might buy a third property but all of them are going to be in my own name because my LLCs have not been formed yet.  One property was purchased for 17,000 and the assessed value is 55,000. One property was purchased for 6000 on credit card and the assessed value is 42,000. The third property if it goes the settlement will be purchased for 17,000 but the assessed value is 54,000. Philadelphia redid their assessments last year after about 15 years. Some properties assessment went from 20,000 to 110,000!  

If I do a straight transfer I am going to pay 4% on the assessed value which is close I close to a $6000 just in transfer taxes just to have them in an LLC. Not to mention the cost of drafting the deeds and recording them with the city and if the charges on my CPA to form the LLC's

But if I "purchased" the properties my transfer taxes are 4% of the purchase price. I don't know how to purchase properties from myself? It seems odd. If my newly formed LLC purchases the properties from me at the same price I paid for the properties within the past 18 months I would reduce my transfer taxes by thousands. But how do you purchase a property from yourself?

I want my properties in an LLC because I want the asset protection and I want the layers between myself and my rental units but I don't know how to set this up without greatly impacting my reserves!!!

I own two properties in Philadelphia and I am considering purchasing my third property. All these properties will be in my name because I do not have an LLC form right now. These properties are in low income areas purchase price under 20 K, rentals possibly 500 per month. I am not flipping them on my and holding or at least I plan to.

if I form an LLC and transfer the property into the name of the LLC I'm going to pay 4% transfer tax on either the assessed market value or the purchase price. If I'm going with the conservative approach and get an LLC for every property, I am looking at three individual LLCs for three properties. For three properties and three transfers I'm looking at several thousand dollars just to change the name and have them legally in a separate entity. That can't be avoided! FML!!! That doesn't even include the cost of setting up the LLCs paying my CPA to handle all the paperwork and paying the title company to draft the deeds. All of those costs really kill my cash flow!!

Considering I have a primary residence I have one vehicle and a wife and a son I'm trying to provide protection in the worst case scenario. I'm well aware I need to shop around umbrella insurance. And what really throws me for a curveball is that I saw some people here giving reviews about insurance providers and some insurance providers will not write an umbrella policy if you have rental properties in the name of an LLC?! Does that sound correct?! If a rental property is in the name of an LLC it will be difficult to obtain an umbrella insurance policy to cover any sort of errors and omissions with your rental properties?! Do you think an LLC is absolutely mandatory if you only plan on owning three properties considering the properties are long-term by and holds in low income areas with cheap renters and possible high turnover rate?!

Thoughts?! 

i have two properties and im trying to purchase my third property.  they were all purchased under my name.  no mortgage.  

i think its about time i get an LLC. if i wanted to transfer the property from my name into the name of my LLC i have to pay transfer tax? 4% of the assessed fair market value for each property? thats like 2k per property? is there any way around this?

this is in philadelphia, pa

I know a lot of people have different approaches to protection want to comes to buying homess? My CPA told me that if I were to buy more than one property it would be in my best interest to have an LLC for every property. I'm aware that is an extremely conservative approach because there is always that "what if" scenario.

I feel property owners really have to be asleep at the wheel for a substantial pay out to be awarded.  Has anybody ever heard of a landlord losing everything he owns including his primary residence where his children are raised and his family getting kicked to the street because they didn't install a banister correctly or there was a fire because of an outlet was not wired properly?!  

If you were to have rental properties in each of your tenants sign a lease are there clauses you can put in the release that waives any and all liability to the proper owner?!  I know asset protection is about layers and I'm wondering that having a lease with a worded clause offers any sort of layer of protection?!  

@jonAnderson- there is natural gas but the previous owner capped the natural gas line. In order to utilize the natural gas I would have to rerun the gas lines and possibly buy a new furnace which are all added expenses that are not needed. I like the simplicity of having everything electric. In Philadelphia it's not like the electric is five times as expensive as gas there are homes that have very high bills when utilizing gas heat. 

This heat pumps are they compared to those ductless AC systems? You have an outside unit in the backyard and you have a couple heads inside the property?  In the summer those heads blow cold and the winter they blow hot?

there is a house that went up for sale around the corner from where I work. I made an offer contingent on the appraisal and home inspection but the house is 15k.  The previous owner broke the house up into three rooms.  the only common areas are the bathroom and the kitchen.  The previous owner does not have separate utilities and if I move forward I would intend to keep it that way because of simplicity. 

The tenants have been there for over eight months in each room rents 100 a week/400 a month. From the $1200 gross monthly rent I will be responsible for electric water taxes and insurance. 

Water taxes and insurance will eat up about $200 and electric can eat up close to $500. I'm trying to think of ways that I can reduce my electric costs. This house is a 1000 square-foot row home in the middle of the block. It's not a freestanding single-family home subjected to the winds on all sides. There are only windows in the front and back of the property, not sides.

I calculated that in the summer months if each room has a 5000 BTU air conditioner that would cost about 50 bucks per month per room. In the winter months a 1500 W plug in spacier would cost about 80 bucks per room per month. That's running 24hrs a day. The other appliances are an electric hot water heater, electric oven, and refrigerator.  There is no dishwasher. there is no washer and dryer in the basement.  I do not want to separate all of the utilities. I do not want to have three electric meters and three water meters. These are rooms and not entire apartments. 

Any possible way I can reduce my electric cost would increase my bottom line. Thoughts?  Plastic wrap on the windows in the winter?  Black out blinds in the summer to prevent the sun to heat the room? Timers that can't be tampered with on cooling/heating units that turn on ever 2 hours? Turning down hot water heater in basement to to 115 degrees from 150 degrees?  I'm trying to be as energy efficient as possible!   

I made an offer on a property that is considered a boarding house. It is a small row home in Philadelphia that is broken up into three rooms. The only common areas are the bathroom and the kitchen and the backyard. The property is all electric. The electric is going to be in my name.  Hypothetically I would be collecting $1200 a month or $100 per week per room. Electric can range anywhere from 300 to 500 for homes of the size. There is no dishwasher. There is no washer and dryer. 

 Are there any absolute pitfalls to avoid when it comes to electriic?  Considering the entire house is electric any reduction of electric usage will increase my bottom line. Space heaters vs baseboard heat?   Should I avoid window air conditioners at all cost and opt for the new energy-efficient floor air-conditioners?   Instead of having one large refrigerator in the kitchen should I get three mini fridges for each room?!