All Forum Posts by: Todd Rasmussen

@Julie Marquez

You need to reframe how you think about insurance. You should not want insurance for a $5,000 water claim. You should be insuring for a million dollar liability claim. Self insure the small claims by choosing a high deductible. On top of everything else you need to know to be an investor you need to be in the 95% percentile when it comes to insurance knowledge too. You need to know exactly what is covered, how much it is covered for, and what perils it is covered from. If you don't have bank loans, you can absolutely self insure, but unless you are sitting on a million bucks, this strategy is high risk and probably irresponsible towards your tenants.

Insure with a mutual company. If there are excess profits at the end of the year, you get a refund.

@Bret Halsey

The easiest way to explore markets is to research turnkey companies. Many provide their research free to potential customers as part of their sales strategy. If you live near one, you can usually get an okay spread of finger foods and a cup of coffee out of going to one of their presentations on a market area as well.

@Krystle Irvin

No, if you have a rental dwelling policy you just change the named insured to the LLC. (You can review your insurance policy for the specific language of who is considered a named insured) We have our personal names listed as additional insured, along with our property manager even though us personally and our property manager are covered in the policy language, it feels nice to have it on the declarations page as well.

Depending on the age of your conventional loan, you can change ownership without consequence to your loan structure. If you don't, the lender most likely has the right to accelerate your loan payments, however if you are paying your loan they never do. Of all the mentions of the due on sale clause on this forum, I've only met one person who even knew of it happening to anyone and in that case, the borrower asked the small-town bank manager personally if he could do it, was told no, and then did it anyways.

@Saman Jafari

On a conventional loan, this is called a delayed financing exclusion to the seasoning requirements.

Yes you can absolutely buy cash and then immediately (or as late as six months later) refinance the property pulling out up to whatever LTV requirements you could have gotten if purchasing with the loan in the first place. Leveraging any position has more risk because you are self imposing additional cost on yourself, but you can borrow more or less depending on your personal risk tolerance.

@Will Walker

I would imagine that giving up tutoring or a side hustle to start wholesaling 8-16 hours a week instead of your w2 would have a smaller opportunity cost for you. But wholesaling is a job and definitely not passive income, so it doesn't sound like it's the solution to your long term goals.

A decade of self employment to any w2 position is going to feel like you are in a cage. I'd wave at the kids on the field trip and wait for the zookeeper to bring you dinner.

In the meantime, look for time that has the smallest opportunity cost for you and do some wholesaling, from there you can objectively determine what gives the most value for your time. Network and rub elbows with your big pharma client and talk about real estate. Generating a couple leads for private money while you are employed might make a w2 tolerable.

When you can't afford to put in hours at the w2, it's time to quit.

Full disclosure, my last day at my w2 is 12/23.

@Helen Mastanduno

Welcome!

@Blair Nye

Call title insurance and file a claim, hire a different lawyer to appear in court for you on Dec 5th (may or may not be provided through title insurance), call rocket mortgage and tell them you purchased the property with a warranty deed and title insurance in January of 21 and give them the contact information for the title insurance company. I'd fly to the Dec 5th hearing to be present as well. The lawyer that handled the closing for you is not your friend and should not represent you in court. In this situation their and your own interest might conflict. Also, give rocket mortgage your mailing address for any correspondence they have moving forward. I would also set up mail forwarding at the property so if they mail notices to the property, they get forwarded to you as well.

@Jim Halpert

You can get a primary home mortgage on your new place. Loans are written based on your intentions at the time of application so you can absolutely get a primary home loan for your new place and keep your existing loan on the duplex.

@Jim Halpert

You should absolutely continue to rent, and why wouldn't you apply for a primary home loan?

@Tim Miller

Hi Tim, @Trevor Marvin lives in CA where he will pay $854 dollars a year to have an LLC. This will outweigh the cost of transferring to an LLC which he could do via quitclaim for a couple hundred dollars.

On a conventional loan, you can transfer ownership to an LLC you control.

https://servicing-guide.fanniemae.com/THE-SERVICING-GUIDE/Part-D-Providing-Solutions-to-a-Borrower/Subpart-D1-Assisting-the-Borrower-with-Property-Related/Chapter-D1-4-Transfers-of-Ownership/Section-D1-4-1-Information-Relating-to-Transfers-of-Owner/D1-4-1-02-Allowable-Exemptions-Due-to-the-Type-of-Transfer/1039972691/What-is-an-exempt-transfer-of-ownership.htm?touchpoint=guide

In regard to having the property in an LLC. Nothing prevents a lawsuit from being brought against you personally. If you personally are making the management decisions regarding the investment property, or personally guarantee loans of the LLC, all of the assets you think are protected are exposed anyways. Corporate entities do not offer significant protection until you have employees acting on your behalf as agents of the corporate entity and the business can obtain financing without personal guarantees. I had the same assumptions about LLC's as you until we talked with a couple civil litigators in depth about asset protection.