All Forum Posts by: Ty Coutts

Hi Levi Wittenberg. My name is Ty Coutts, and I am a loan officer in Denver. I appreciate your passion for real estate investing and would love to talk about creative financing options if you're interested. Please don't hesitate to schedule a time to talk below if you're interested.

https://calendly.com/tycoutts

Hi CPT Awesome! Thank you for your service and for sharing your plans. Your background and goals are impressive, and it's great to see your enthusiasm for real estate investing. I am a loan officer licensed around the United States and would love to answer any questions you may have. Don't hesitate to schedule a time below if this appeals so that we can chat and discuss creative financing options.

https://calendly.com/tycoutts

Best,

Ty Coutts

Awesome thanks. My contact info is in my profile!

Hello, John Giggy. Here's some clarification and advice regarding your client's concerns about purchasing a property with a CLTA (California Land Title Association) policy:

Understanding CLTA Policy
CLTA Policy: A CLTA policy is a type of title insurance policy commonly used in California. It insures against defects in title up to the date the policy is issued. It generally covers issues like forgery, undisclosed heirs, and errors in public records.

Lender Acceptance: Many lenders typically accept CLTA policies because they provide coverage for common title issues. However, lender policies can vary, and some may prefer an ALTA (American Land Title Association) policy, which offers broader coverage.

Impact on Future Sale:

Cash Buyer vs. Mortgage Buyer: It's true that some buyers who need mortgage financing may prefer properties with ALTA policies, which provide more comprehensive coverage.
Potential Buyer Pool: While a CLTA policy might not deter all mortgage lenders, it could potentially limit the pool of buyers who are eligible for certain types of loans or who may prefer the broader protection of an ALTA policy.

Recommendations:
Discuss with Title Company: Engage further with Chicago Title or another title company to understand the specific reasons why they are offering a CLTA policy instead of an ALTA policy. They can clarify any concerns about lender acceptance and provide insights into local market practices.

Consult with Lenders: If your client anticipates selling the property in the future and is concerned about buyer financing, consider reaching out to local lenders. They can provide guidance on their policies regarding title insurance and preferences for ALTA vs. CLTA policies.

Negotiate Terms: If feasible, negotiate with the seller or title company to potentially upgrade to an ALTA policy if it provides greater peace of mind for your client and enhances future marketability.

Educate Buyer: Ensure your client fully understands the implications of the CLTA policy versus an ALTA policy, including potential impacts on resale and buyer financing preferences.

While lenders can generally lend on properties with CLTA policies, buyer preferences and market dynamics may vary. It's crucial to gather specific information from local title companies and lenders to address your client's concerns effectively. I am here to answer your questions, so don't hesitate and set up a time to chat with the link below if you're interested in more insights as I am a loan officer. 

https://calendly.com/tycoutts

Hi, Luke Edwards. Seller financing can be a great way to acquire property, especially if the seller is open to it and favorable terms can be negotiated. I would consider these possible strategies. 

Subject-To Financing:

Definition: In a subject-to deal, the buyer takes over the existing mortgage payments without formally assuming the loan. The mortgage remains in the seller’s name, but the buyer gains ownership of the property and makes the payments.
Risk: This can trigger the Due on Sale Clause, so it’s essential to understand the risks and have a plan in place if the lender calls the loan due.

Wraparound Mortgage (All-Inclusive Trust Deed - AITD):

Definition: A wraparound mortgage involves creating a new mortgage that "wraps around" the existing one. The buyer makes payments to the seller, who in turn continues making payments on the original loan.
Structure: The new loan is typically for the full purchase price, minus any down payment. The seller benefits from the spread between the interest rates of the old and new loans.
Agreement: Ensure a clear agreement on who will be responsible for the existing mortgage payments and how any arrears or defaults will be handled.

Seller Second Mortgage:

Structure: The buyer gets a new first mortgage to pay off the existing loan and a second mortgage held by the seller for the remaining balance.
Consideration: This may require refinancing the existing loan, which can be costly and may change the loan terms.

I hope this helped. I am here to chat as I am more than happy to inform people on the industry. Please schedule a time below to chat below if you have any questions you would like answered on a call.

https://calendly.com/tycoutts

Jeremy H., I think I understand the question. Let's say you want to transfer your rental property to an LLC for liability protection, which may transfer the beneficial interest. Here's a step-by-step approach:

Consult Your Lender: Contact your lender to discuss the possibility of transferring the property to an LLC.

Land Trust Setup: If the lender does not permit a direct transfer, consider setting up a land trust and transferring the property to the trust.

Beneficial Interest Transfer: Transfer the beneficial interest of the land trust to the LLC. This step should be done carefully, with legal advice, to minimize the risk of triggering the Due on Sale Clause.

Monitor the Loan: Ensure timely mortgage payments to avoid drawing attention from the lender.

Legal Support: Have an attorney review all documents and agreements to ensure compliance with local laws and mortgage terms.

The Due on Sale Clause is a critical tool for lenders to protect their financial interests, manage risk, and maintain the quality of their loan portfolio. While it provides significant benefits to lenders, it also imposes restrictions and potential challenges for borrowers. Understanding the implications of this clause is essential for anyone involved in real estate transactions or mortgage agreements. If you found this confusing or would like more Infromation, please schedule a time to chat below:

https://calendly.com/tycoutts

Sokun So, it's not uncommon for property managers to prefer setting up OTA (Online Travel Agency) listings on their accounts to streamline their management systems. However, there are pros and cons to this approach:

Pros:

Streamlined Operations: Property managers can integrate their systems more efficiently, leading to potentially better management and guest experiences.

Experience and Optimization: They might have established profiles with good ratings and reviews, which can help attract more bookings.

Cons:

Loss of Control: If you stop working with the property manager, you could lose access to the listing and the reviews associated with it.

Dependency: Your business becomes more reliant on the property manager, which could be problematic if the relationship sours or if their service quality declines.

As an experienced STR manager, you're already familiar with many aspects of managing rentals. Here are some tips for dealing with property managers:

Due Diligence: Research and vet property managers thoroughly. Check references and reviews, and speak with other property owners they manage for.

Clear Communication: Establish clear expectations and communication channels from the start. Regular updates and transparent reporting are crucial.

Performance Metrics: Set performance metrics and review them regularly. Ensure the property manager is meeting your standards and expectations.

Secondary question: 

Old Listings:

Established Reviews: Old listings have a history of reviews, which can attract more bookings and build trust with potential guests.

SEO Benefits: Established listings may rank higher in search results on OTAs.

Brand-New Listings:

Flexibility: New listings can be optimized from scratch based on current best practices and market trends.

Promotions: OTAs often give new listings a visibility boost to help them get initial bookings.

It's essential to balance the benefits of a property manager handling OTA listings with the need to retain control and flexibility over your property. Ensuring clear contractual terms and maintaining good communication will help protect your interests.

If you have any further questions or need more specific advice, feel free to ask! I would love to talk over the phone to learn more. If you're interested, please schedule a time below:

Calendly - Ty Coutts

Hello, Christina Whitaker. Expanding your portfolio into the Clayton, NC area could be a great opportunity, especially considering its recent growth and development. Here's a very small pros and cons list I've made for the area:

Pros:
Potential for Appreciation: Rapid growth and development can lead to property value increases.
Stable Rental Demand: Proximity to Raleigh and economic opportunities ensure a steady stream of potential renters.
Desirable Location: Good schools, amenities, and quality of life attract families and professionals.

Cons:
Market Competition: Increased demand can lead to higher property prices and competition among buyers.
Out-of-State Management: Managing a property remotely can be challenging without a trustworthy local team.
Economic Dependence: The area’s growth is closely tied to the economic health of Raleigh and the Research Triangle.

Hi, John Campbell. Converting your single-family home into a rental property involves several considerations to protect yourself and ensure smooth operations: 

Establish an LLC:

Liability Protection: Holding the rental property in an LLC can protect your personal assets from potential lawsuits related to the property.
Tax Benefits: An LLC can offer tax advantages, such as pass-through taxation, where rental income is taxed at your individual income tax rate.

Insurance:

Landlord Insurance: Ensures coverage for property damage, liability claims, and loss of rental income.
Umbrella Policy: Provides additional liability coverage beyond your landlord insurance, offering extra protection.

Deductions:

Mortgage Interest and Property Taxes: Continue to deduct these expenses.
Depreciation: Depreciate the cost of the property over 27.5 years, excluding the land value.
Maintenance and Repairs: Deduct costs related to maintaining the property.
Property Management Fees: Deduct fees paid to the property manager.

Filing Taxes:

Schedule E: Report rental income and expenses on Schedule E of your tax return.
Separate Accounts: Maintain separate bank accounts for rental income and expenses to simplify bookkeeping.

Lease Agreement:

Solid Lease Terms: Ensure your lease agreement is thorough, covering rent amount, due date, late fees, maintenance responsibilities, and eviction terms.
Legal Review: Have the lease agreement reviewed by a real estate attorney to ensure compliance with local laws.

Tenant Screening:

Background Checks: Perform credit, criminal, and eviction history checks on prospective tenants.
References: Contact previous landlords and employers for references.

Property Management:

Regular Inspections: Schedule regular property inspections to ensure it's being maintained properly.
Maintenance Fund: Set aside a reserve fund for unexpected repairs and maintenance.

Moving Out of State:

Communication: Maintain open communication with your property manager. Establish a system for regular updates and handling emergencies.
Remote Management Tools: Utilize property management software to track income, expenses, and tenant communications.

Overall Cost vs. Security:

Weigh Costs and Benefits: While maintaining an LLC and having comprehensive insurance can add costs, they provide significant protection against risks.
Professional Advice: Consider consulting with a real estate attorney and a tax advisor to tailor your setup to your specific situation and goals.

By structuring your rental property thoughtfully and taking these precautions, you can better protect yourself and manage your investment effectively. I am a loan officer, if you need more detailed advice or have specific questions, feel free to ask! If so, please schedule a time to chat below. 

@Skie Lewis-Hernandez awesome! I'm looking forward to it. If you want to schedule a call this is my Calendly link. SCHEDULE A CALL