All Forum Posts by: Chris K.

@Brandon Morgan

Some places require a property manager by law. In those cases, the answer is "yes" out of necessity. I think Scranton still requires one. But most suburbs municipalities did not the last time I checked. So, you might be okay. 

Aside from that, my experience is that most people hire property managers for two reasons. 

First, it saves time. People often forget that their time costs money. Hiring a property manager can be smart move depending on the value of your time. 

Second, property managers can shortcut building a local team. If you lack connections where you invest, having someone on the ground is valuable. This is especially true in smaller communities like Scranton/Wilkes-Barre. It’s one reason why many large developers, who can hire the best lawyers in the world, often work with local attorneys. You’re not necessarily hiring them because they’re the best lawyers. You’re hiring them because they have valuable local connections. Most of the time, you don’t need a lawyer who is the second coming of Clarence Darrow. You are better off with a "competent" lawyer who knows all the important people in the area who can help you.

Disclaimer: While I’m a licensed attorney, 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.

What area do you reside in Pennsylvania? Philly? 

Disclaimer: While I’m a licensed attorney, 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.

@Tim Porsche

Pennsylvania has a fair share of required statutory disclosures. If they failed to provide them (and most wholesaler contracts fail), you may have a reasonable basis to demand a refund. Perhaps that can help you negotiate a partial refund. 

That said, I would probably take this post down. I'm not your attorney. But it is generally a bad idea to discuss litigation strategy in a public forum using your real name. Most folks know about BiggerPockets at this point, and you are potentially giving the other side an Exhibit A on why you shouldn't win.   

Disclaimer: While I’m a licensed attorney, 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.

Assuming you don't want to go to a "Big Law" firm: 

1. For Texas, @Ronald Rohde is the person to talk to. 

2. In Oklahoma, I would try David M. Box from Williams, Box, Forshee & Bullard, P.C. On the slightly bigger end, try Larry G. Ball from Hall Estill. 

3.I don't have a solid lead for Arkansas. But I did work on a project with Jason Boyeskie at The Law Group of Northwest Arkansas. He and his team seemed knowledgeable. 

4. Don't have any leads for you in Kansas or Missouri outside of Big Law attorneys. 

Ron is here on BP. Feel free to shoot me a PM if you want introduction to the other folks. 😇 

Disclaimer: While I’m a licensed attorney, 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.

From an ownership perspective, you can utilize an LLC that you own 100% to own your real estate asset. Note that this can sometimes cause unexpected consequences. For example, Pennsylvania Department of Revenue takes the position that transferring a property from your personal name to an LLC (vice versa) triggers realty transfer taxes.

From an Airbnb licensing perspective, it would depend on what your local municipalities allow. I assume most municipalities have no issues with an LLC owning an Airbnb property. But there might be other issues that may cause headaches if you transfer the assets.

Disclaimer: While I’m a licensed attorney, 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.

@Wayne Greenhalgh

It would probably help folks give recommendation if you gave geographical areas where you intend to invest in. 

Disclaimer: While I’m a licensed attorney, 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.

@Derek Bleam

1. Complex setups don't offer much protection for most people. This is especially true if you're actively involved in your rental properties. Many states --- including Pennsylvania --- recognize what is commonly known as "participation theory," which holds owners/officers personally liable for the corporation's torts if they participate in them. For smaller landlords, this erodes protection quickly since they "participate" in virtually all decision making for their LLCs. 

2. In Pennsylvania, transferring property between LLCs triggers realty transfer taxes. Doing this haphazardly can trigger a lot of tax payments. 

Disclaimer: While I’m a licensed attorney, 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.

What do you mean by "register"? Are you asking if the LLC can own the underlying rental property?

Disclaimer: While I’m a licensed attorney, 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.

For smaller multifamilies, you might be competing with non-investors. House hacking, for example, is now such a common idea that regular people do it all the time. 

For larger investors, the other advantages of real estate (e.g., tax savings) might be more important than immediate cash flow. Also some investors can wait out decades if they wanted to. I've known institutional investors who have basically purchased city blocks over a decade or two for their next "big" development project. 

Disclaimer: While I’m a licensed attorney, 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.

@Diego A.

Just to avoid confusion on this topic, whether you classify something as a partnership has nothing to do with whether you are selling securities. In other words, going with a partnership structure does not necessarily allow you to avoid the SEC. It depends on what the partnership agreement says --- especially on the question of how much control each partner has. 

Disclaimer: While I’m a licensed attorney, 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.