All Forum Posts by: Chris Martin

Talk to your loan servicer. Tell them what you posted here. They may have a program for you. Back in my day, if you missed a payment (which as an investor I never did), the loan servicer would just start foreclosure proceedings as soon as possible. All that changed after the GR (Great Recession) and by law, loan servicers can't crush you like in the old days. 

In NC, and I'm sure in other states under comparable forms, in the 2-T standard form (I don't have a current copy) under 5(b). BUYER REPRESENTATIONS click "DOES have to sell or lease other real property in order to qualify for a new loan." That will show to sellers that your buying is contingent on getting a seller for your current property. This process happens all the time. 

As an investor, I've never experienced what you've posted. I buy/sell without regard to other property (except when pooling in a mortgage tranche) so can't relate directly with your scenario, but talk to your loan servicer. they can help. 

Quote from @Brenda B.:

Quote from @Chris Martin:

@Brenda B. you should really have an attorney prepare a multi-member LLC Operating Agreement (OA) and run the idea(s) you have on financial arrangements by a qualified accounting professional. The rationale is: make sure you've thought through all (or most) of the issues that can come up. Think about your taxes on Form 1065, specifically how your K-1s will look in the future. Your P/L/C percentages (Profit/Loss/Capital) are key here. Does your partner want to take a big chunk of the losses (depreciation) to offset income? Is Capital contributed by just cash contribution or by services (like managing property) contributed? All this is part of the planning and should always be in writing, ideally in the LLC OA. 

I've been extremely fortunate that so far, my partnerships (from most of 18 members to the least at 2) have worked out. I spent a lot of time reading through my state's LLC laws. I recommend you do the same. I googled Texas LLC code and I think this is applicable for you. Learning the LLC rules and educating yourself is extremely valuable and costs almost nothing, but a little time.

 Thank you Chris! great information! He told me he wants to be my silent partner, no time to work on the flipping. I will make all the decisions, and we will split the profits 50/50 or the losses 50/50. Also, with your partners, are they silent partners? Do you shared the banking information? meaning do I give hin access to the bank account?

On some projects, I have "silent partners." In NC LLCs, we use the term "Interest Owner" which can be represented by a membership interest or an "economic interest." These terms are defined in Chapter 57D (NC LLC Act) of NC State Statute and referenced by the Operating Agreement. "Economic interest owners" are not LLC members. Regarding checking account access, all members can have access to the Operating Company LLC finances. All interest owners also get K-1s issued each year. 

I prefer Greenville, NC over Rocky Mount or Wilson. Greenville has a little better population growth and is about 90K people, roughly the size of Rocky Mount and Wilson combined. All these cities, though, are in Tier 1 counties (per NC DOC Tier Ranking). When I bought an apartment in Greenville NC in 2017, Pitt County had been a Tier 2 county for decades. Three of the last 5 years, though, they slipped to a Tier 1 designation. Of note, Edgecombe County (Rocky Mount) is the most distressed county in NC. 

@Brenda B. you should really have an attorney prepare a multi-member LLC Operating Agreement (OA) and run the idea(s) you have on financial arrangements by a qualified accounting professional. The rationale is: make sure you've thought through all (or most) of the issues that can come up. Think about your taxes on Form 1065, specifically how your K-1s will look in the future. Your P/L/C percentages (Profit/Loss/Capital) are key here. Does your partner want to take a big chunk of the losses (depreciation) to offset income? Is Capital contributed by just cash contribution or by services (like managing property) contributed? All this is part of the planning and should always be in writing, ideally in the LLC OA. 

I've been extremely fortunate that so far, my partnerships (from most of 18 members to the least at 2) have worked out. I spent a lot of time reading through my state's LLC laws. I recommend you do the same. I googled Texas LLC code and I think this is applicable for you. Learning the LLC rules and educating yourself is extremely valuable and costs almost nothing, but a little time.

For those REI in NC, note that "transaction coordinator" is not defined in NC state statute and for the most part is not recognized by NCREC. But, per this recent Top Complaints piece in NC REC news, "transaction coordinators" (TCs) could be considered a star in the closing show: 

"Brokers may also utilize the services of a transaction coordinator to assist them with
managing administrative aspects within the transaction. However, if a transaction
coordinator does not have an active real estate license, they cannot participate in
brokerage activities like negotiating repairs and contingencies...."

Full disclaimer, I have a SFR for sale now with a broker I've recently used for selling many (6-8) properties and they (the brokerage) use a TC as my interface as part of their process. Along with the "closing coordinators", the "transaction coordinators" perform a specific set of tasks in the overall process. 

It's 2024 and it seems everyone has forgotten the Great Recession (GR) and Financial Crisis (FC). While returns on recent investments for most real estate investors have been stellar, we have experienced times of financial difficulty not too long ago. I knew several people who had an undeniably great stretch (probably in that 20% range) until the GR and FC hit them in the face. 

I'm not saying that some people can't make 20% annual returns, potentially for decades, but those people are extremely rare. I'm also not saying that a price correction is looming, certainly not like post-FC. I am saying that short-term, my return on US Treasuries is better than buying anything with a door with cash in my market. I sleep well. 

Below is a snapshot of recorded documents from one (note #1) of the many investors who got slammed by the GR and FC. Almost all of the properties went back to the lender (banks - note#2) or sold at the courthouse steps. 

My point: The GR showed us the downside of leverage. As market values plunged, banks called loans (lines of credit) and held firm on builder draw dates. As a courthouse buyer I saw many builders, REI, flippers, speculators lose everything post GR/FC. For them, it was painful.

@David Pereira there is no shame in buying with cash on hand, F&C. Earlier in my career I did it often, however (as others pointed out), with the intent to leverage once stabilized. You can buy with cash and (potentially) leverage later. I think you are prudently thinking things through, which is one attribute of a successful investor. Good luck to you. 

Note #1 - name removed

Note #2 - One entry I circled is not a bank or financial institution

Such a product/service doesn't exist, as far as I know. What paralegal would do title searches on tax actioned (assumed to be unimproved) property? There is no money in that business. 

What I do is HIRE a paralegal to do the PROPER due diligence when I have a short list of tax delinquent properties I potentially will bid on. They can find most outstanding liens, but they may not find all. That risk, of buying land with impairments, goes with the territory. Inherently, when buying at the courthouse steps or sheriff sale, you potentially are inheriting someone else's problem. My advice would be to buy at a significant discount to REAL value so that the law of averages works out for you. 

Good luck to you. 

Can you confirm the company is named "Crowne Lending Services"? This spelling is not listed, as far as I could find, as a lender of any sort, hard money or otherwise. 

Trying to get an "equity line of credit on my rental" might be a tall ask for a lender, since this product would put the lender in a second lien position. Unless you have a large amount of equity, lenders generally don't offer these loans. Even then, many won't lend unless you have a long-time and established banking relationship with them. 

Good luck with your endeavor. 

I haven't noticed a drop in rates. Rates so far in 2024.

I buy 4-week T-Bills (treasuries) to get 5%+ on idle money. I, like millions of others, have cash ready to invest under the right conditions. My view: no hurry. 

For what it's worth, I've been in exactly your position with a tenant of mine in a Holly Springs PUD back many years ago. We, collectively, resolved the issue with tenant parking the vehicle off-site.

Regarding getting a copy of the R&Rs, talk to the HOA president or other board member of the HOA. They are property owners in your neighborhood, not an external company with no stake in the community other than management fees.

The (implied - recorded in Wake County) 1997 CCRs predate the North Carolina Planned Community Act but many sections of this Act pertain "to all planned communities created in this State before January 1, 1999."  Absent a recorded amended declaration, the recorded document is the governing document. I think @George has a good response. 

What I have seen before is "selective enforcement" practices from some management companies. I'm not sure if this is applicable to you, but here are some references:

- Is Selective Enforcement of Restrictions Acceptable?

 - NC Chapter 20: Motor Vehicles § 20‑4.2. Definitions - Commercial Vehicle

- NC DPS definition - Vehicles with a GVWR of 10,001 lbs. or more used as part of a business (including a non-profit organization) and crosses state lines, are considered commercial motor vehicles for purposes of most of the safety regulations.