All Forum Posts by: Bob Floss II

@Kristin R. You'll need to check local rules, in Illinois we have a statutory power of attorney that is provided by the State and we modify it to fit the situation. Have you tried putting together a members certificate or a resolution voted on by the members to give you authority to sign on behalf of the LLC? It wouldn't need to be notarized and should do the same thing. You can reference the property specifically and it should appease the underwriter.

The girls are too busy buying everything to post.

@Courtney James Just my two cents, I like to surround myself with people who are doing business, not people who used to do business. I have very little patience with instructors or coaches who haven't gotten their own hands dirty and know how it's done. Go to events and talk to people actively working in the business and they are usually happy to discuss their routines, habits, and rituals to be successful.

@Holly Hudson You can potentially use the same team members, but they need to be well versed in commercial property. I've found most residential agents and attorneys are clueless when doing an apartment building. For agents in particular, the skills you learn as a residential agent will not serve you as a commercial agent, it's a whole new set of skills.

@Mo Muigai Since you are financing the other 75%, is it safe to assume this is commercial financing? Would the lender allow you to set up an LLC, borrower the money through the new LLC with a personal guarantee so you have a partnership agreement at closing?

@Samson Tefera HML's are in the business of making money and being liquid. They will give you time but it's going to cost you.

Unfortunately, I've run into these scenarios. There was an out of state guy posting a lot of my clients properties on craigslist for $100,000 over what my client had paid for them. Surprisingly, my client didn't care. He said if this guy manages to find a buyer, when he approaches us we'll squeeze him in the middle and make him overpay to close the deal. I messaged the guy several times and messed around with him. Property was being sold from a Trust (it wasn't in a Trust) and the property was as-is, where-is (huh?), drive by only cash offers. Needless to say, nothing happened.

I did have to issue a cease and desist letter when one of my clients completed a gut renovation of a $4 million condo in a high rise in downtown Chicago. He was checking the listing online and found someone had his condo available for rent on airbnb for $1,000 a night. 

@Courtney M. Yes, this happens often. One thing you want to specify - does the lender just want an entity or do they want a SPE, or single purpose entity? A single purpose entity means the operating agreement and articles of organization limit the entity to only own the property you are purchasing. This comes up with rental properties you plan on holding. The lender has assurances the LLC will only have the debt and income from that property. The underwriters like them because having an entity with a set debt to income ratio is easy to underwrite.

Otherwise, the lender may just want you to have an LLC that is basically empty to open up more options in the event of default. You'll end up signing documents as part of your closing package that essentially state, in the event you default on the loan, instead of foreclosing on you, the lender will take full control of the LLC.

@Renee Sobering You don't use a syndication for flipping. You can either put your family members in the position of the private lender secured on the property with a mortgage and interest rate or put together an LLC to purchase the property and have the operating agreement spell out the terms for the partnership or JV.

@Ralph Chiaia I do a lot of closings for auction properties and I give every client the same decision. You can take the seller provided title that's questionable and save money, or get your own title policy that will cover you but you are going to run up your closing costs a couple grand.  I get about 70% getting their own title and 30% take the free title.

I just had one where they wanted to charge the buyer an extra $250 to check for any local municipal liens. I just about lost it. How can you provide title insurance and you don't check for liens?