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DNova posted:If what you're saying is all accurate, then what's the point of the LLC being designated the beneficiary? If a court ordered is made to reveal the beneficiary of the trust, and it comes back as the LLC, finding the owner of the LLC is at that point trivial, is it not? So why not just skip that step and make yourself the beneficiary? The point of making the LLC the beneficiary is that if you do get sued for something not negligence related, it still limits your liability to that which is inside the LLC. And yes, 1 LLC per property is absolutely key. You want to keep your assets as separate as possible. None of this will do a thing if you're actually sued! This prevents people from thinking you have a lot of assets so it won't be worth their time to take a case suing you. To protect you if you're actually sued, you need an umbrella policy, but I thought that kind of went without saying.
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Feb 3, 2014 17:04
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Isn't the trust redundant though? In certain states(Nevada for example), you don't have to specify the owner or owners when submitting the application for incorporation. That means there is no official state record of ownership and the only way an attorney will be able to obtain your name is with a court order. You still get the limited liability without additional overhead of setting up a trust. Nevada LLC have other advantages in that there is no yearly maintenance fee and there is also no state income tax. It's a one time setup fee(forgot how much it was but I remember to be negligible).
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Feb 3, 2014 18:17
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lostleaf posted:Isn't the trust redundant though? In certain states(Nevada for example), you don't have to specify the owner or owners when submitting the application for incorporation. That means there is no official state record of ownership and the only way an attorney will be able to obtain your name is with a court order. You still get the limited liability without additional overhead of setting up a trust. You can change the beneficiary of a trust without it being a sale, so you can change around ownership of the property with just a call to your trustee. Some states charge a tax when a home is sold or transferred. This can also be advantageous for actual estate planning purposes (it'll skip probate, doesn't need to be in your will, etc), or if you need to change corporate ownership. Some of these you also can do with an LLC. But I also personally think someone is more likely to target an LLC than a trust, and more layers mean more work for the plaintiff's lawyers, which is always good. E: and doesn't a Nevada LLC require you have a place of business in Nevada? I couldn't find anything in a cursory search. Of course there are places where you can pay a fee to have a "place of business" there, but that would kill any lack of yearly registration fees. Bloody Queef fucked around with this message at 18:41 on Feb 3, 2014 |
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Feb 3, 2014 18:32
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Bloody Queef posted:The point of making the LLC the beneficiary is that if you do get sued for something not negligence related, it still limits your liability to that which is inside the LLC. Sorry if I'm being dense here but why not just rely on the umbrella policy? If you have a property under an LLC, do you have any filing obligations with the IRS or is it -for sure- a disregarded entity? What happens if you want to pull out some equity? Or sell it? It gets really confusing to me really quickly when it comes to having assets under complex arrangements, and I would really like to get a better handle on it. Does Nevada have a registered agent requirement for LLCs (to accept service)? Missouri does, and such services can cost over $100/yr/entity. How do finances work? Do I have to keep separate business accounts under the each LLC's name in order to pay for services (landscaping, utilities, etc)? How do I account for adding cash or pulling cash out of the LLC's bank account? I have many more questions I can't remember just now.
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Feb 3, 2014 18:40
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DNova posted:Sorry if I'm being dense here but why not just rely on the umbrella policy? You can rely on insurance, but it's not exactly fun to go through a lawsuit, regardless of whether or not you'll have to pay up, and I imagine your umbrella policy premiums will go crazy through the roof if one happens. Single Member LLCs are by definition disregarded entities with the IRS. http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Single-Member-Limited-Liability-Companies Your state, however, is a different matter. I can find out specifically for your state if you want, but many states comply with the IRS in this regard. My home state, Delaware, does, so I don't worry about it too much. In terms of paying bills: This can all be done under your name, or the business name if it's a disregarded entity. With a sale, you get the cash. I'm not sure how this would work if you wanted to do a Home Equity Loan on the house, but worst case scenario, if you can't get one with an LLC (or trust) being the recorded owner, just transfer the property into your name. Registered agent business: Not sure about this, I happen to live in Delaware, so use Delaware LLCs and don't need a registered agent.
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Feb 3, 2014 18:55
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DNova posted:I suppose the answer would be so that you can have one LLC per property, but I don't know, this all seems very easy to get around if you are sued by a competent lawyer.
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Feb 4, 2014 01:15
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Please disregard the part about not needing to file member names with Nevada LLC. When I was researching this in 2008, the application form did not require it. Nevada requires member or managers names now apparently. https://nvsos.gov/Modules/ShowDocument.aspx?documentid=1004
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Feb 4, 2014 01:23
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Here's a really lovely webpage about LLCs in Nevada: https://www.nevada123.com/learning-center/corporate-veil When I was looking to open an LLC (which I still need to do), I found out that the state in which I reside (Nevada) offers some pretty good protection. I don't know the validity of the claims in the webpage above (though I've seen it referenced multiple times on multiple websites), but it's something to consider. If you're lazy and you don't want to open the page above, basically it says that Nevada's LLCs have only been pierced once in the past 20 years and that involved fraud. Again I'm pretty ignorant on the subject as a whole, but maybe someone else can fill us in regarding whether or not all of the confusion presented by Bloody Queef is still worthwhile in a situation outlined above. Oh and for anyone asking, I don't think you need any resident whatever to open a Nevada LLC based off my prior research. We're a really business friendly state. Edit: ^ welp
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Feb 4, 2014 01:25
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LLCs are still a very useful tool for any landlord even if they provide minimal asset hiding. They still provide great asset protection in terms of limiting liability. If your LLC is sued and the jury awards over the limit of your insurance, the LLC will limit the liability to the property in question.
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Feb 4, 2014 01:39
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lostleaf posted:LLCs are still a very useful tool for any landlord even if they provide minimal asset hiding. They still provide great asset protection in terms of limiting liability. If your LLC is sued and the jury awards over the limit of your insurance, the LLC will limit the liability to the property in question. This is not really a guarantee, though.
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Feb 4, 2014 02:08
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I live in California and here, every deed to a trust is to "[person name] as trustee of [trust name]." So, if you are planning to put a house in a privacy trust, you will need to find a third party willing to serve as trustee - because coming up with a fancy anonymous trust name is less effective if you are on title as the trustee. The trust itself can be drafted in a manner to give the trustee minimal liability, but it can still be a small hassle to have someone else getting your property tax bills and etc. It is courteous to explain to the trustee at the onset that this is part of an asset protection or anonymity strategy, because if there is a lawsuit, the trustee will most likely be named. I usually only see celebrities or otherwise well-known people doing this, and they often times name the business manager as trustee. As for using an LLC for asset protection, for the most part if you keep the accounts segregated and don't use the LLC as your pocketbook, it can provide an effective defense. However, as many other posters have mentioned, asset protection strategies are more of a discouragement or a hassle to a creditor, rather than ironclad protection. And, if the lawsuit is for something you did personally as the manager of the LLC - like discriminate against a protected class of potential renter, you will be named in the lawsuit as an individual. And, if you or the trustee, or the LLC gets sued, you still have to defend the lawsuit regardless. Personally, I own three properties in LLCs and one outright. I have large umbrella policies, and the only reason the three properties are in LLCs is because there are multiple owners and it made it easier to work out the terms of the co-ownership agreement and for me to manage the properties - not for asset protection. Also, as for privacy, even though I am not the registered agent, somehow my name is associated with the LLCs on a google search. I'm not sure how, but it was disappointing to find that out. What I can also say is that owning properties in an LLC is a big hassle when it comes to getting loans. If you are planning to buy and hold all cash, then this does not apply, but in my opinion one of the major assets of investing in real estate is the ability to leverage it with financing. So, my experience with financing is that #1 I was not able to get a conventional agency (Fannie/Freddie) loan on a residential property if it was held in an LLC, and #2 for commercial properties, if the LLC is obtaining the loan, then the principal owners have to guarantee the loan. Even for "non-recourse" loans, I have always been asked to personally sign "bad boy" or carveout guarantees. tl;dr: unless you want to make sure your name is not associated with that particular property for personal reasons, I think it's much easier to just buy it in your own name and pay a few hundred dollars a year for a huge umbrella policy.
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Feb 9, 2014 04:12
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Four Finger Wu posted:What I can also say is that owning properties in an LLC is a big hassle when it comes to getting loans. If you are planning to buy and hold all cash, then this does not apply, but in my opinion one of the major assets of investing in real estate is the ability to leverage it with financing. So, my experience with financing is that #1 I was not able to get a conventional agency (Fannie/Freddie) loan on a residential property if it was held in an LLC, and #2 for commercial properties, if the LLC is obtaining the loan, then the principal owners have to guarantee the loan. Even for "non-recourse" loans, I have always been asked to personally sign "bad boy" or carveout guarantees. As for the trustee bit. Use your Real Estate attorney, this is very common and an attorney will be the best trustee.
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Feb 9, 2014 04:41
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Hey, you know what's stupid? When my building has lead paint, but the condo association does not want to pay to remove it from the common areas. So even if I remove it from my apartments, I still legally can't rent to people with children or visiting children. Plus, I can't legally tell them they can't rent either! I like how I asked the property manager and the state lead paint program and the EPA what the gently caress I'm supposed to do and they all shrugged and went WELP! Apparently the unofficial answer I'm seeing from online lawyers is that no one has ever actually been sued for refusing to rent to families in a situation like this, so while it's a grey area I should just avoid advertising to them since safety trumps discrimination.
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Mar 25, 2014 15:23
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Zero VGS posted:Hey, you know what's stupid? When my building has lead paint, but the condo association does not want to pay to remove it from the common areas. So even if I remove it from my apartments, I still legally can't rent to people with children or visiting children. Plus, I can't legally tell them they can't rent either! I like how I asked the property manager and the state lead paint program and the EPA what the gently caress I'm supposed to do and they all shrugged and went WELP! This is why do never buy condos I think - crappy HOA's. Man that blows.
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Mar 25, 2014 17:02
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I can (and would) tell a family there is lead paint, I'm required to disclose that. But then the govt says they can't legally be there, but I can't legally refuse to let them be there or even hint for them to look elsewhere. It's a wacky conflict that has never been reconciled.
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Mar 25, 2014 17:18
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Zero VGS posted:I can (and would) tell a family there is lead paint, I'm required to disclose that. But then the govt says they can't legally be there, but I can't legally refuse to let them be there or even hint for them to look elsewhere. It's a wacky conflict that has never been reconciled. Which state says that families can't be there? I just put the lead paint disclosure saying that there might be lead paint, but I don't know and then the info packet about lead paint.
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Mar 25, 2014 17:24
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Zero VGS posted:I can (and would) tell a family there is lead paint, I'm required to disclose that. But then the govt says they can't legally be there, but I can't legally refuse to let them be there or even hint for them to look elsewhere. It's a wacky conflict that has never been reconciled.
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Mar 25, 2014 17:52
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Can anyone speak to the unique differences between managing a multi family property versus a SFH? I'm running numbers on a pretty distressed triplex, and the comps I see seem too good to be true. Like 3-4% of the purchase price plus repairs in total monthly rents. Are the problems just dealing with the tenants maybe not getting along? Noisy upstairs tenant, whiney downstairs one?
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Mar 29, 2014 14:56
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I've been pretty consistently hosed over (or attempted to) by my last few landlords. They will without fail attempt to deduct reasonable claims + ~£300 from our deposits in the hope that we won't bother to go through the courts for such a small sum. I've won every single time but it is still incredibly annoying and stressful.
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Apr 6, 2014 15:40
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Bloody Queef posted:Can anyone speak to the unique differences between managing a multi family property versus a SFH? It's mostly that you'll have more turnover (people see apartments as a place to live, where a house is "home"), and possible tenant conflicts (though I've found those are pretty rare). A lot of 2/3/4 unit properties in older areas are shoddy conversions from single family houses, and that can cause some major issues WRT permits and construction quality when you go to fix something. That said, 3-4%/month!? Where is this place?
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Apr 29, 2014 16:15
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KaiserBen posted:It's mostly that you'll have more turnover (people see apartments as a place to live, where a house is "home"), and possible tenant conflicts (though I've found those are pretty rare). A lot of 2/3/4 unit properties in older areas are shoddy conversions from single family houses, and that can cause some major issues WRT permits and construction quality when you go to fix something. I posted this when I was looking at just numbers, but just the purchase price and rental income don't tell the story. I actually did a walk through and found out the previous owner was a straight up slum lord. Roaches everywhere, holes big enough to fall through in the floor/ceiling between units, water damage everywhere. I like the location, but I don't have the cash to gut it and fix it, and I'm not going to keep the current situation as is and just rake in the cash. The numbers are even better now as the price dropped. Triplex is $49,000 and monthly rents are $2150.
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Apr 29, 2014 19:46
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Hey everybody! Earlier in the thread I posted info on a tenant screening company called Resident Research. I went back to those posts and edited out my personal e-mail address because, well, I don't work there anymore! The company is still there and still offering very thorough reports at an extremely reasonable price...the only difference now is that you won't have a goon taking care of you if you sign up, that's all. PM me if you have any specific questions, I can still put you in touch with someone who can take good care of you.
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Apr 30, 2014 03:24
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timp posted:Hey everybody! Love us and leave us, I see how it is. Out of curiosity, was there any talk about changing/relaxing the requirements for getting access to trade lines? I really don't want to pay $60  .
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Apr 30, 2014 11:12
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Bloody Queef posted:I posted this when I was looking at just numbers, but just the purchase price and rental income don't tell the story. I actually did a walk through and found out the previous owner was a straight up slum lord. Roaches everywhere, holes big enough to fall through in the floor/ceiling between units, water damage everywhere. I like the location, but I don't have the cash to gut it and fix it, and I'm not going to keep the current situation as is and just rake in the cash. That's a ridiculously good price:rent ratio, even if the condition is crappy. I couldn't buy the land for a building like that at that price here (DC area), much less a building. Even the crack-den slumlord specials here are more like 2%, and that's with all utilities paid by the landlord.
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Apr 30, 2014 13:46
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Have any of you ever heard of getting payments from the government for road expansion projects that eat up part of your land?
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Apr 30, 2014 13:54
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DNova posted:Love us and leave us, I see how it is. Out of curiosity, was there any talk about changing/relaxing the requirements for getting access to trade lines? I really don't want to pay $60 No, but I did get way better at explaining it!  - Without it you still get the credit score, number of bankruptcies, balances owed to other property managers and apartment complexes, percentage of delinquent accounts, and number of collections/charge offs - $60 may seem like a lot, and while it's true that some companies won't charge you for it, they will always charge you a monthly or yearly subscription, or enforce a minimum ordering amount per month, which a private landlord will almost never meet, and you'll quickly lose more than $60 paying those fees - RR pays its third party inspection company exactly $60 for each one, meaning they make 0 profit off of the inspections - You can even customize the info they give you. Last week we had a guy ask us to fail tenants if they owed a balance to a utility company, which we were happy to do. Without a site inspection, RR can still look at the trade lines and tell you all about it...they just can't let you see them. - Criminal and eviction searches are not affected by having or not having a site inspection, and those are really good (same with resident and employment verifications) - If RR gets caught allowing people to view trade lines without having paperwork on file proving a site inspection was performed they could be fined millions of dollars by Transunion. Then there's no more RR. Honestly...truly...if you're on the fence about getting one, call them and ask about your scorecard criteria (and put my replacement to the test  ) Chances are they can work something out with you and you really don't need it!
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Apr 30, 2014 14:02
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DNova posted:Have any of you ever heard of getting payments from the government for road expansion projects that eat up part of your land? Is the expansion taking place in the right-of-way? If so I don't think you can get anything. As I understand it the compensation was already paid out when the initial RoW was put in place.
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Apr 30, 2014 15:59
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LogisticEarth posted:Is the expansion taking place in the right-of-way? If so I don't think you can get anything. As I understand it the compensation was already paid out when the initial RoW was put in place. Assuming there is no right of way or the expansion exceeds it, it's a normal thing to be paid some amount when they grab a slice off your parcel, right? Is it negotiable? This is mostly out of curiosity, not something that is happening to me.
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Apr 30, 2014 16:02
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LogisticEarth posted:Is the expansion taking place in the right-of-way? If so I don't think you can get anything. As I understand it the compensation was already paid out when the initial RoW was put in place. Depends on the document that created the RoW. Sometimes they provide for recurring damage payments, but most road easements do not. DNova posted:Assuming there is no right of way or the expansion exceeds it, it's a normal thing to be paid some amount when they grab a slice off your parcel, right? Is it negotiable? Cranbe fucked around with this message at 16:06 on Apr 30, 2014 |
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Apr 30, 2014 16:03
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KaiserBen posted:That's a ridiculously good price:rent ratio, even if the condition is crappy. I couldn't buy the land for a building like that at that price here (DC area), much less a building. Even the crack-den slumlord specials here are more like 2%, and that's with all utilities paid by the landlord. Yeah. The numbers are great. Rent is way out of wack with property values in the Philly metro area and even more so in Wilmington, DE (where the slumlord triplex is) I've thought about buying it with an investor who would be willing to dump the purchase price and 100k in renovations, but I just can't justify the cash flow hit for myself. I can do almost three single families in a nicer area with less work to be done for that amount of cheddar.
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Apr 30, 2014 18:10
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DNova posted:Assuming there is no right of way or the expansion exceeds it, it's a normal thing to be paid some amount when they grab a slice off your parcel, right? Is it negotiable? Yes, if the state/city/county needs right of way from a property owner it involves the entity paying the landowner, either through money or through agreed services. If negotiations don't work out the government entity will condemn the land needed and pay the land owner whatever the land is appraised for. Typically its a last ditch effort as it takes awhile to condemn property. Usually the entity will just route the road through another property owner who is happy to sell.
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May 1, 2014 02:09
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There's a deal where some guy needs money asap and has some land that apparently is going to be sliced off for a road expansion. He claims the state/whoever will pay as much as he wants for the entire parcel, which would still be worth a good amount after the work is done. Trouble is that I can't find any real evidence of his claims about the work or payment from the government. I might make a few calls to see if I can corroborate his claims but at the moment it's looking like there are too many unknowns for me to want to get much further.
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May 1, 2014 02:33
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A couple of things off the top of my head: 1) It might be years before they try to purchase it 2) Plans could change 3) Might use eminent domain to buy at a price they deem to be the fair market value (aka not whatever he wants)
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May 1, 2014 03:56
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DNova posted:There's a deal where some guy needs money asap and has some land that apparently is going to be sliced off for a road expansion. He claims the state/whoever will pay as much as he wants for the entire parcel, which would still be worth a good amount after the work is done. Sounds very speculative. You can double check some of his claims by researching with your states DOT. The project should be listed in their program of improvements which typically plans out 2 to 5 years. That said, I think he's full of it. No way a state would straight up say they'll pay him whatever he wants for the land. Especially in these "government is bad lets cut everything" times. Its not uncommon for land speculators to hold onto pieces of land adjacent to planned roadways. However, this really isn't for selling parts for ROW. Its mostly for the development opportunities it brings in the future
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May 1, 2014 13:47
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fishhooked posted:Sounds very speculative. You can double check some of his claims by researching with your states DOT. The project should be listed in their program of improvements which typically plans out 2 to 5 years. That said, I think he's full of it. No way a state would straight up say they'll pay him whatever he wants for the land. Especially in these "government is bad lets cut everything" times. I stated it unclearly, but what I meant was that he is claiming the government will pay roughly $X when the project actually begins, and he is asking for $X for the parcel. Essentially the land would be free if his claims were true. I checked on the state DOT website and the project is listed, but it seems to start half a block away and go in the wrong direction from there. I can't find anything else online about it. It's an attractive idea but I am not really buying the whole situation. He says he came up with the reimbursement figure ($X) based on what they were paying land owners for a previous section of the same project about 7 years ago. I wish I had a clear idea of how to get some reliable verification of any of it. sleepy gary fucked around with this message at 13:56 on May 1, 2014 |
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May 1, 2014 13:53
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Sounds like a scam to me. -Need money ASAP -It's a sure thing! -You're gonna make a lot of money for doing basically nothing! I'd stay away.
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May 1, 2014 14:44
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FrozenVent posted:Sounds like a scam to me. The land is worth the asking price without any other considerations, but I am not really interested in buying a parcel of mostly undeveloped commercial and residential land. I don't think it's an outright scam, but if I can't verify anything about the road expansion project reimbursement, I'm not at all interested in the deal. But for what it's worth I have been talking to the guy and he's for real. He had a lot of engineering work done on the site to prepare it for a medium sized building where he was going to run his now-defunct business. That doesn't really do me any good though because I am not a commercial land developer and things in that area aren't moving quickly enough for me to buy it on speculation. update: I told the guy what I was able to find and put the burden on him to show me some tangible proof otherwise. He got back to me and said he can't find anything either, and that he made some phone calls to the town and it turns out that they might expand the other side of the road and that basically nothing is certain about it. Also the timeline is no less than 4-5 years for the project to start. That's a definite no-go for me. The guy seems pretty genuine after dealing with him, but he certainly overplayed the road expansion thing in his ad description. Now I can turn my attention back to finding some nice apartments. sleepy gary fucked around with this message at 17:46 on May 1, 2014 |
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May 1, 2014 15:04
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You know what's great... buying a condo for 68k, getting a Home Equity Line of Credit for 75% of the value, using that to buy a second condo in the building in cash, then moving into the second condo, calling a second bank and getting a second HELOC on that. I keep finding people to rent them for $1000 a month so I guess I'll just keep chaining up loans until I own the whole building?
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May 1, 2014 22:47
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That, or convert a couple floors into a kickin rad penthouse.
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May 2, 2014 05:18
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crazypeltast52 posted:That, or convert a couple floors into a kickin rad penthouse. Don't even joke about that. If I won the lottery or just came into some money, I'd buy the apartment building I live in (80 or so units) and turn 3 or 4 units into a rad penthouse. But I'm just some punk kid who doesn't own anything, but I would like to get into owning rental property.
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May 2, 2014 19:40
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