All Forum Posts by: 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.

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.

I have also used Investors Title Exchange Corp and second what @Sophia Griffies posted. I've done two 1031 exchanges with ITEC but have no interest in doing another in this (lack of) market. 

Quote from @Andrew S.:

Quote from @Kimberley Smith:

Quote from @Melanie P.:

I recommend narrowing your focus to just wholesaling for now. Rather than pay for a course I suggest identifying a wholesaler in your area that is advertising off-market homes for sale regularly (at least 5+ per month, more is better). Contact them, advise them that you are trying to get into wholesaling, that you are moving to Raleigh in a year and a half and have 15 hours a week that you can help them in exchange for tagging along. Tell them that you'd like to call through their oldest, worst leads to get comfortable talking with people - can I help with appointment setting? Can I help with lead generation? Can I make sure your car is stocked each day with everything you need in the field? Can I help run comps for appointments you have set up? Etc.

Wholesaling is not a glamourous profession. The skills you learn doing this will pay you actual money but also come in super handy anytime you negotiate with anyone, have to put effort into getting a tough deal to close, real estate terminology, contracts, and so on.

Good luck with your journey. 

 Excellent advice Melanie! I am a licensed wholesaler in the Raleigh area doing 30-40 deals per month so if you would like to ask any questions im happy to help

I wasn't aware that  "Licensed wholesaler" is a thing?  Or do you mean you are a licensed real estate agent who wholesales properties?  Just curious,

I thought the same thing. From a NCREC license lookup, seems like you nailed it Andrew... licensed agent doing wholesaling. Only one Kimberley Smith (note the spelling) licensed in NC, so I probably have the right one. 

"30-40 deals per month" would put you in the category of higher "closings" ("transactions" may be a better term) than any other broker in the triangle, so I suspect quite a bit of embellishment. I've sold seven properties with A Cole Realty and would expect I would have heard about a broker closing a deal a day by now. I'll inquire tomorrow... 

I assume this is a bank owned (REO) or government owned (e.g. HUD) property since you know appliances are missing. When you buy a (real) "foreclosure" at, for instance, a trustee sale the only requirement for the sale to go through is you need to pay the winning bid price in full. In general, it is more difficult to finance a foreclosure because of lender requirements.

If the PCR (Property Condition Report) identifies the property as IE (Insurable with Escrow) the, yes, a lender may allow you to fund an escrow account at closing. If the PCR shows the property as UI (UnInsurable) then many traditional lenders may turn you down.