All Forum Posts by: William Baumann

Tell your friend a deal is only a deal at HIS price.  If someone wants to over pay and get stuck out of ignorance, so be it.  He needs to bid his price and nothing more.  Don't chase deals until it is no longer a deal.

A guru podcast I watched once mentioned that they bid on 20+ REO's every week for what they need to get the property for to be profitable. 99% of the time their bid is rejected. But if they pick up one property, it is a win.

Remember anyone can sell anything for any amount they want, makes no difference what price they put on it, you just focus on YOUR price.  If they accept, great, if they reject, so be it. It will be there again.

You are all echoing the same thoughts I had. I guess I just needed confirmation that I wasnt being overly picky, or being to nonchalant about it either.

I am going to bookmark this meth lab reporting site as part of my elimination checking. 

Ok, I have been talking to a property owner for about a month now, he really wants sell, and has been making arrangements to move and put the property under contract to me for wholesale.  The numbers are decent, not rockstar but enough that everyone is happy and I can sell the house to a rehabber.

Today I happened to be driving past the property in question and I see a red, a blue and a yellow, papers on the front door. The city has condemned the property, a no entrance warning, and a decree from the fire marshall.  WTF!

Tried calling the owner, no answer 3 days now.  So I start looking up numbers to call about all this and notice a link with the property address under a meth lab reporting website.  But it is from back in 2012. 

So my question is, do I even want to mess with this deal at this point? I know there are reporting issues and remediation issues with the whole meth lab deal, and I am not sure how a rehabber will feel about a property with these possible issues.  Here is the report.

@Carlos O. You projects in your business plan are just that and you can/should adjust them as things start rolling for you.  I like to lowball my projections, so go with low numbers. 2K for a deal @ 12 deals a year. Really low right? Good. Now try to meet that projection.  Then beat it.  Next year, re-write your business plan based on your numbers for your first year.  Try to meet it, then beat it.

Your business plan is not just a bunch of hopes and wishes for the future, it can also be a motivational tool. 

You can use suite or box number, usps knows this trick. But yes you definitely want to use a PO Box, they don't cost that much like $12/month I think when I looked last.

I think it will all depend on the terms of sale and the state laws.  In most cases, anything left behind becomes your property and your problem. As far as title, talk to your local DMV and explain the situation and see what advice they have. Again it all depends on the terms of the property sale and state laws.

No matter what, I would definitely get your lawyer involved in the contract side of it.  It may just require a custom contract for that property with clauses that state they have 1% equitable interest with a revocation/surrender clause for death, rental payments, etc.  Not sure how that would all be worded to be legal but that is would be something to talk to your lawyer about.

It depends on what your trying to do.  If your doing rehab/sell, or buy and hold rental and this is where things get ...interesting.  

An entity (LLC, S-Corp, etc) is designed for asset protection. This is also the reason banks don't like to finance to an entity. They want the ability to come after you and your personal assets in case of a default on the loan. However, there is a very serious side to carrying property in only your name and it is for the same reason. I have posted about these reasons a few times already.

The real risk is that you are exposing your personal assets (house, cars, bank accounts, etc) in any legal action against you or your investment property.  Any lawsuit that comes about, everything you own is now up for grabs to satisfy a judgment.  If you operate an entity, and keep each property in its own entity, you confine the judgement to only the assets in the entity that is sued.  This way your personal assets can not be taken to fulfill a judgement against an entity and vice-versa.

Yes there are tax implications, financing implications, and legal implications to every variable there is.  I highly recommend that you spend a little time and get a free consultation or even pay for legal advice from a business lawyer that is knowledgeable with real estate transactions/investors to determine a plan of action.  This will help you decide when you need to form an entity, how to structure it, and how to move property into and out of your entity to provide you legal protections for your personal assets.

It depends on what your plan is? Wholesale, rehab and sell or buy and hold. If you just wholesaling you can get away IMO without a LLC. If you doing a rehab and sell or buy and hold, you should look at getting an LLC setup for each property.

You have to understand the point of setting up an entity like an LLC. It is to protect your personal assets from lawsuits against your business activities. So for example, lets say you purchase all 4 properties for flipping.  All 4 are done and 1 gets sold. All are under your personal name.  The new owner of the 1 property you sold sues you because of termite damage in the roof, just an example, and they sue you for repairs, damages and failed disclosure.  Their suit is for $15,000 for repairs, $100,000 for damages, and $50,000 for failed disclosure.  

Lets just say they win in court, that is $165,000 judgement against ALL your assets in your name. That means that they can come after not only the property you sold them but also the other 3 properties, as well as all your personal assets that are in your name too (bank accounts, retirement accounts, your personal home ,cars, etc.)

Same scenario, but this time you have an LLC for your business and each property is in it's own LLC. They get the same $165,000 judgement against you, they can only go after the property that is in the LLC for their property, the one you sold, and or your business LLC. They can't come get any other assets to fulfill the judgement. Not your personal home, cars, bank accounts, nor can they get at the other 3 houses as they are in different LLC's.

Setup like this, in the worst case scenario, you would file bankruptcy in your company LLC and start a new one.

So, do you really need to do this?  Is this a real risk?  Maybe, maybe not.  But people like to sue for everything and anything these days no matter how ridiculous it is.  Remember the McDonald's coffee lawsuit?  Need I say more? Just as your job is as an investor, some people made a job out of suing unprotected people.