All Forum Posts by: Chris K.

@Craig Raymond

I don't see why you would struggle to find a lender if you look at portfolio loans. If you have a high net worth, you likely have asset that you can pledge as security. If so, a bank will lend to you. You might not get the best terms (e.g. lower LTV rate, shorter balloons, etc.). But someone will lend as long as you have assets.

I would start with a local bank and go from there. This is true if you are looking to refi something on the smaller end. If you have ultra high net work (let's say at least eight figures), then you may find some success with a national bank. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Vincent Q.

They are about the same. Scranton has higher rent and more "mature/developed" downtown compared to Wilkes-Barre. But taxes are higher in Scranton and you have a bit more bureaucracy to deal with. 

But for most purposes, they are about the same. Both are historically 10 cap markets. So an average property should cash flow. Natural appreciation won't go too far compared to inflation. So finding a way to add value is generally a good idea. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Bernie McAnena

Pennsylvania Inheritance tax is based on the situs (basically the location) of the property. If it the property is in Pennsylvania, the inheritance tax applies. If it is outside of Pennsylvania, then no Pennsylvania inheritance tax. 

When it comes to tax sales, you just have to assume the worst or be prepared to sunk money into the due diligence. Because of this, there's a lot of risk involved in tax sales. It's easily the riskiest way to purchase real estate in Pennsylvania. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Bernie McAnena

If you want to sell it or take a loan on it, you will need to do a quiet title action to get marketable title. If that's not your goal, you could try to wait out the relevant periods. I would just note that the PA Department of Revenue probably won't wait for 20 years before it tries to foreclose on your property. They are slow but not 20 years slow. 

Work with a reputable title company. When they don't have to insure the property, some title companies slack off on the search. I had many clients come to me with incomplete title searches. They had to redo it when I reviewed the file to make sure we have all the documents. 

Inheritance tax wise, you can contact the Department of Revenue directly. They have a special department that deals with requests for lien releases. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Arta Montero

The main difference between stock versus real estate is the amount of influence you can exert over the investments. An average investor simply does not have enough money to have a say in the operations of a public company. On the real estate side, you have more control over the investment. 

You could argue that a stock investor can gain control by carefully selecting certain stocks. Unfortunately, history has shown that even "experts" are terrible at beating the market average. This was the insight that Jack Bogle and Vanguard had when they created the first index fund. If you want to see how extremely wrong folks can be when it comes to handpicking stocks, go to WallStreetBets and take a look at some of the posts. It's funny and sad at the same time. 

One other advantage that real estate may have are ability to easily leverage and significant tax advantages if you can use them. As far as I know, there's no real equivalent to that in the stock market. 

For what it's worth, I know many people who got very rich without even glancing at the real estate. That said, real estate tends to play a role in how many people gain serious wealth.   

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Greg Scott

When I form multi-member LLCs, I always tell my clients to check with a CPA to make sure they are good with it. In a perfect world, I would mandate it. But I cannot do that for practical reasons. 

With an LLC, you have a lot of options when it comes to structuring the operating agreement. There's a "default" tax language that most lawyers use. But that may not actually fit the clients needs. And most real estate lawyers, despite their expertise in real estate, are unqualified to advise the clients on all the tax implications that can arise from it.

@Kinju Dudhia

I would find a CPA and have the CPA work with your attorney. Depending on the state and how the realty transfer taxes work, the consideration issue might be a red herring. The more important question is the tax consequences --- especially on the capital account side. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Joe Kamenar

As @Ashish Acharya mentioned, you can allocated the income/loss in whatever way the parties agree upon. But it will have tax consequences. When you combine that with the fact that you are dealing with a vacation rental, it's probably time to work with a qualified CPA to figure out what exactly your options are. Taxes for vacation rentals can get rather complicated with multiple layers of analysis. 

On the legal end, I'm not big fan of the arrangement. You could do it but not sure if it is worth the headache. It's one thing to spend five figures on legal fees for a large project. Another to do so for a vacation rental. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Mark Greenawalt

In terms of reviewing the forms? My guess is that an attorney can review the forms in about two to three hours. So whatever rate they charge times 2 to 3. 

The challenge is that no attorney can guarantee that the form they reviewed will address every single situation that a wholesaler may come across. For example, take a standard residential lease. While crazy stuff happens once in a while, most landlord-tenant relationship are well defined. So creating a lease that you can use for multiple properties is a reasonable task. 

The problem with wholesaling is that there is no one type of transactions. Sometimes you are dealing with a "residential" property; other times, you are dealing with a "commercial" property. Many properties that end up being wholesaled have some odd issues that make a realtor not want to touch it. Trying to cover all those variables in a single form is very difficult to do. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Mark Greenawalt

For what it's worth, 99% of the wholesaling contracts I run into are nowhere close complying with Pennsylvania Law. I cannot tell you how many times wholesalers fail to comply with some of the most basic laws (e.g. RESDL) when trying to wholesale their deals. It might be fine if all the parties walk away happy. But it's a pretty risky way to do business. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Mark Sheppard

If you don't need an attorney in Fredericksburg itself, I would try @Ronald Rohde. Active member on BP with an office in Dallas, TX. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.