All Forum Posts by: Tim Priebe

Kelly, good job on your possible first purchase. I have to agree with @Holly Scott. I have a client that is in the process of purchasing a house and lot outside of Cripple Creek. They have run into several issues due to the distance from Colorado Springs. Even people in Woodland Park are very busy and do not want to make the drive out there. If they do, they are booked for months. I am not trying to be discouraging but just give yourself plenty of time to get your contingencies investigated. 

Tim 

Look around on BP for the "should I create an LLC or not" posts/podcasts. It can elicit strong opinions. As an attorney I will tell you that they have a place in your future. However, I will also tell you that people get way too concerned about them first and then never get around to using them properly or buying that first property. Find a good deal first. Get good insurance. Then come back to the LLC question.

Andrew, Michael hit on the main points. You have to make sure that person has the authority to sell the property. I have such a case right now- investor got hit on a direct mail piece, "owner" says he has valid quit claim deed, goes to purchase, title company says the QC not valid from relative in probate. We are now reopening probate matter to clear up title issues.

Best to speak to probate attorney in your state to verify probate issues.

Ramon, if you are looking just to tie up the name see if MI has a name reservation or filing a DBA (doing business as) instead of filing for the LLC. Once you file the LLC, you are responsible for tax returns, annual filings, etc. Check out: http://www.michigan.gov/documents/business/Guide_to_Starting_a_Small_Business_271487_7.pdf

Really good discussion. Generally, you can have one incorporation in one state and then do business in other states without incorporating there. However, before you can "do business" in that other state, you may need to register as a foreign corporation. This means that if you have property in one state and you need to file an eviction, good attorneys will check to see if you are registered in that state. Some states will not allow you to use their court system without being registered there first. So you say great I will just register right before I file suit. But some of these hungry states (for money) will then trigger an investigation to see how long have you been doing business in their state without registering. This could then bring up past fees and penalties. Gotta do your due diligence.

Jojo:

Why are you thinking about this? What type of assets are you wanting to protect?

Tim

Andrew, you only need an LLC for each property if you want a happy lawyer and CPA. Depending upon your current assets, you may need some type of incorporation but for most it is more important to get some deals under your belt first. Get good insurance.

Understand that for each incorporation that you have, you need to do a income tax return and state filing each year. While not a huge deal, it is something to take into consideration.

I was at a seminar many many years ago and the presenter was selling the idea of an incorporation for each floor of any commercial building that you bought. Good idea on paper but comes with all sorts of other issues that most people don't know until it is too late.

Lots of good information about this issue on this site.

Tim Priebe

Chaits: First congrats on the first purchase. I am an attorney practicing real estate law but I am not licensed in NJ, just CO and CA. You have received some good advice from the other replies. Chances are you are going to need to get the loan in your individual names. If not, then you both will be signing personal guarantees for the loan.

I would definitely suggest a LLC soon however given that you have a partner. If nothing else please draft some sort of partnership agreement. You have to outline who will do what, what is expected in return, how to divide the profits/losses. Most people think there will be no issues. Trust me, you will have issues. Good agreements are like good fences....

Great job. I have looked at manufactured homes before but we had problems finding comps that the bank would take. How did you get around that?

I am an attorney that practices probate law in Colorado. By "probate list" I am assuming that means people who have filed a probate case? If so, realize that selling an asset in a typical probate does not happen right away. In Colorado, and I assume a lot of states, there are administrative things that must occur first. Things like having the court recognize who the executor is, the filing of the initial listing of assets, etc.

I would probably start with the oldest cases first, if you are told this information, as they maybe more ready to move on selling a house in the matter.