All Forum Posts by: Paul Choate

@Chuck B.thanks for the request! I have been meaning to update the thread. 

I have decided I can't run the park at the level it was at. The park's trailers and tenants were ran into the ground by the previous owner and I need to start over. It was very heartbreaking to see the conditions some of them where living in. I just could not do it. I told some of them to move and evicted others. I don't know if I explained before but there was a pretty bad drug problem which has been removed. I have actually had complaints from the remaining tenants of the place being too quiet! Currently I have 3 trailers rented and the main house so the cash flow is $1250 per month ($250 for each trailer and $500 for the house). My expenses are $40 for trash service and $50 for power to the well. I spent about $1000 fixing up the main house. I have done little maintenance on the trailers.

So... Current plan is to focus on cleaning out the 9 single wide trailers (I have to have them scrapped) and removing the remaining three tenants. I have worked on the double wide (90's model so it's worth keeping) and it will soon be ready to rent. That will give me two units with monthly cash flow of $1000 and the monthly payment of $460 and $200-$300 of other expenses.

Once I have the entire park cleaned up, I am then going to see if there is a market for lot rents and stop owning any of the trailers. There are no other trailer parks in the town. I have eleven spaces to rent. You can't even see the park from the highway out front and there is no sign. I have let some time pass so the reputation of the place will die down and I can give it a fresh start.

All that being said, I should be moving faster on the change over. A few things have been holding me back. 1. My wife and I had a baby boy in March! 2. I had been working on the other park and it is under contract for $44000 so I should clear about $15000 on that one in the next 30 days or so. It has taken longer to have the title clean up than I imagined. (Quick note- if you buy properties at tax sales in OK, plan to file a quiet title action as most title insurance companies will not approve the title without it.) 3. I had a lady give me a house and I have been focusing my cash flow on getting it ready to rent. (Another note- everything I do is cash flowed by my rental properties. Takes awhile but it can be done.)

Story on the free house- A lady came to me because she was about to have this house demolished by the city as a nuisance. The lady is older and this was her husband's rent house. He had been working on it and had passed away before it was completed. A couple of years had gone by. The reason the city wanted to tear it down was the house was not secure and homeless people had been living in it. It is a five bedroom two and a half bath 2000 sq ft two story home. I have put about $4000 in it and I have to put about $3000 more. It will rent for $700-$800 per month when I am done. I have let it distract me from the park but I figure it will not hurt to let some time pass on the park. I plan to pull cash out of this house once I am done and use it to get the park going even faster.

Everyone's thoughts are welcome!

The last day in Oklahoma for a home owner to do something is the confirmation of sheriff's sale which is generally 20-30 days after the sheriff's sale. The dates can vary a lot so be sure to check as soon as possible. 

@Account Closed I know this is not much of a comfort, but the gains of wiping out a few months of rent in a bankruptcy are probably not worth the effort of moving. Obviously, you will not be giving them a good reference!

Bankruptcy attorney here-

After they file bankruptcy, they are going to have less debt, often the same assets and income and they can not file Chapter 7 Bankruptcy for 8 more years. Most of my clients are more stable and have higher credit scores after filing bankruptcy. Personally, I would love to have recently filed debtors as tenants.

There are always exceptions and fact dependent rules. In general- bankruptcy doesn't have the ability to change the terms of your lease. It can cancel it. If they stop paying AFTER they notify you of the actual bankruptcy filing, do not try to collect on them personally. This means you get a case number or a letter from the Court. You should contact your legal counsel to decide how to move forward. Bankruptcy does not allow them to keep your unit but there are special rules if they stop paying and do not intend to assume the lease. 

Out of curiosity- I have not had any of my clients "hurt" a landlord after bankruptcy beyond breaking a lease early. Has anyone had a different experience? 

a foreclosure will often clean up the title allowing the mortgage holder to sell it more easily. A DIL does not resolve any other liens. Individuals who are being foreclosed on may have other legal problems which can fowl up the title. 

lot of disparate issues- 

I almost don't know what to say...

Jerry, I know of no jurisdiction which provided the protections you speak of for a tenancy by the entireties. I can not speak to your state's laws but I can say with certainty that you would be completely exposed in Oklahoma. I would like some clarification on you statement that an llc will not protect you from liability when you clearly state that it does protect you on your out of state properties. It ether does or it doesn't have liability protection built into it. (Btw- it does.) 

Everyone- there are always exceptions to the rules. That's why people have to hire me;)! Just because you can mess up and lose the protections of the law does not mean they are not there. Get your ducks in a row using competent legal and other professional advice, proper insurance and great business and management practices and you should be fine. (Seth- there's my answer to your question.)

Why would you ignore any part of the protections available to you?

Bill, I will argue all day long with your results. You are the rule not the acception. Most people make it through life just fine. That is how everything is set up. It's when people/businesses fail that these things matter.

I see it everyday. People blame themselves when bad things happen. Bad things happen!!! It's called life. You are not better or worse because you did or did not get sick, divorced, death, lose your job, get in an accident etc. it happens to a percentage of us and we should be prepared for it. 

One more time about attorneys- every year our bar association releases statistics about the attorneys who recieve bar complaints. One of the numbers is a breakdown of complaints by the number of years in practice. Guess who gets the most complaints? Attorneys in practice over 20 years and it is not close.  

Bill, quick note on attorney advertising-

Attorneys were not allowed by law to advertise before 1977. Your attitude is/was very common and is enforced aggressively by the state bars where possible. Not surprisingly, this happens to prop up the oldest attorneys and firms who also happen the the ones who make the rules. I started out on my own by out working everyone. I worked harder and longer for less money than every other attorney in my area. I file more bankruptcies an anyone else in both of the counties I primarily work in. I am a better attorney for the experience. I welcome people to speak with other attorneys before coming to me. I have yet to lose a client to the old dogs who charge sometimes twice as much as me and file a tenth of the cases I do. 

I advertise. A lot. 

Once again this is taking shots and has nothing to do with the merits of the argument. 

if I was Scott, I would have seen the comments in a negative, personal light. 

Legal entities- if you can't afford $10+ in legal fees or judgements (like me) you probably need protection. I can walk away from all of my properties tomorrow and start over. I can do that because they are not me. They are separate legal entities. However, if someone sues me personally and I lose, I will have to file bankruptcy and lose almost all of my personal assets. This isn't complicated. 

@seth Mosley 

I think my terminology stands. I said "shots" which you continue to take. I made no claims as to anyone's intent. His credentials are not in question. He is a licensed attorney in Texas (I take him at his word) and while I would have given more specific disclaimers about the jurisdictional limits of his advice, he is more qualified to speak than anyone else on this thread. That being said, other attorneys and specific individuals may have differing opinions or experiences and that is good to discuss. Comments about how long he has been practicing and assumptions about his motives are not.

I think Scott made it very clear he is open for business. We all are. That is why we are here. I would be more worried about those claiming to have made it and just offering their "advice" for free. They have no skin in the game or are the ones hiding. 

So, I gather you have a problem with his statement of an absolute, "you will be sued". I hope people of any level of intellect/education would recognize hyperbole. He was trying to make a point. As an attorney, I see the worst and have to be able to deal with it. Everyone is on the verge of bankruptcy to me because everyone one I talk to all day is. His area is asset protection and I would guess a fair number of his clients come to him after the fact. It's his world view.

Please note: most of the posts on this thread against Scott did not say they have never been sued. They just said they have not lost enough for it to hurt. Scott is still correct - in general. 

for those following this discussion, I am a not comfortable with the shots taken at the attorney from the podcast. He is/was speaking in generalities which may or may not apply in your situation and jurisdiction. I am a bankruptcy attorney. While I appreciate all of the advice on here from those who have been successful and have never experienced any problems, I spend every work day cleaning up the mess for those who lost. Your experiences and advice are not valid or useful for my clients. 

I am not saying any one technique is going to save you when bad things happen. However, sticking your head in the sand and avoiding or ignoring proper legal advice will cost you. I don't hear anyone claiming they don't use legal structures at all. (If that is what you are hearing internetland- please consider the source.) everything has a proper time and place. 

 BP is here to help educate you. It should be your starting point. You should be  paying significant money to a licensed attorney in your jurisdiction to make any real decisions for your specific situation when the time comes. He or she has their license and professional liability issuance on the line. You are not getting that here. If you choose to go it alone, good luck!  If nothing ever goes wrong, you won the lottery. If you are like the vast majority of people, you need all the help you can get. 

Denigrating asset protection is a luxury the average person can not afford. It's just another layer in your business. It should not be a big deal. Like everything else, you can over do it. Learn all you can, seek proper LEGAL advice, and act.