All Forum Posts by: Chris K.

1. I would use a PA entity for the PA business. There's no massive advantage but I would say it is generally easier to own property and do business in a state using native entities. Now there are times where using say a foreign entity might make sense. But I don't see any good reason for you to favor NC entity over a PA entity in your scenario. 

2. Not sure what an S-Corp would do for you in the above scenario. Do you expect to make a lot of active income? In any event, I generally would not own land with an S-Corp unless there is a very good reason for it. 

3. You can create a self-directed IRA without an S-Corp. If you can swing it, I would first max out an ERISA 401k plan versus a self-directed IRA. It is arguably one of the most creditor-proof way to own 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.

@Diego A.

When people say "syndication" in context of real estate, they really mean filing the necessary paperwork with the SEC to sell securities. Most of the time, they are seeking to rely on exemptions Section 506(b) or Section 506(c) to avoid having to register their offering with the SEC. You will need to work with lawyers that specialize in handling those registrations. It's a different skill set from handling the legal work for the underlying real estate transaction. Some lawyers can do both --- some cannot. 

Not sure if @Ronald Rohde still posts here but he is probably a good starting point for any TX transactions. 

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.

Answer to both questions are "maybe." Unfortunately, no one can actually answer this without looking at the title and the foreclosure proceeding. 

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.

Predicting supply and demand is a hard task. But at the macro level, mankind is very good at meeting market demands. This is especially true in the United States. 

I would not qualify any of the recent events as fundamentally changing the real estate game. I would categorize it as more as both political parties doing some potentially unwise things in respond to COVID and election cycles. 

Also, one nitpicky point to make is that the United States is nowhere near capacity in terms of land. Take the population density of New York City --- certainly dense but nowhere as many other cities. You could fit the entire population of the world into New York City metropolitan area if we really wanted to try. 

Granted, that might look like dystopia to those who grew up in rural areas in the United States. But we don't have an actual land problem. 

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.

@David Schiman

I think it mostly depends on your level of expertise in real estate. For example, do you have any experience handling a construction project? There are many benefits to getting into real estate. But in my experience, most of the successful folks end up becoming an expert in some kind of vertical within real estate. Or you have to make some lifestyle changes to take full advantage of it (e.g. real estate professional tax status). 

Assuming you do not want to take those steps, I believe investing in something like VTSAX yields better returns and is "safer." Of course, this assumes a long-term hold. 

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.

@Sanil Subhash Chandra Bose

I don't know if he is still around but John Maida, Esq. seemed knowledgeable and in the general area. I know he has done a lot of quiet title work. 

I would just say that before you go full scale, get an attorney to order a full title search and do a proper review. I have had many buyers get excited about a "steal" they had a upset sale. The problem is that they searched for liens and judgments but didn't really do a full title search for things like restrictions (e.g. HOA). So, they didn't realize they essentially purchased land that is completely worthless beyond just serving as a green space.

Not saying that is the case here. But it has happened so many times to folks I've met over the years that I raise it as a possibility. 

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.

@Austin Latty

You are basically making a capital contribution to your LLC as the owner. That should be fine but hard to say without looking at your operating agreement and structure. In those situations, you may have to make a loan. Either way, I would engage the services of a tax professional as you do need someone to help you maintain your books if you haven't done so. 

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.

Breach of Implied Habitability is mostly a factual question. Based on the facts you wrote, it sounds like you tried to fix the alleged breach was prevented from doing so. If so, that is a very good fact pattern for you. But it's hard to judge on an online forum.

I would just note that in Pennsylvania, all appeals are reviewed de novo. Meaning from the Court of Common Pleas's perspective, it is as if the magistrate hearing didn't happen. If you haven't already, get a lawyer as it is generally a bad idea to be a pro-se litigant. 

One item I don't understand is why is your appeal only being heard now? If they filed a timely appeal, it would have prevented their eviction. 

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.

@Neal Patel

This is a space where I have a good amount of experience in. As @Henry Clark pointed out, there are many operators in the space that do not want to own the building. They are essentially looking to enter into a long-term lease with a building owner. 

You will need to decide whether you will act as the operator or just the landlord. Depending on the answer to that question, you may have different loan options (e.g. USDA, SBA, Freddie, Fannie, etc.). Some people also focus on LIHTC angle as well. There are also REITs and PE money in the space. 

In all situations, you still need some bring some cash equity. Without knowing more about what you and your partner are looking to do, it's hard to say what option is right for 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.

@Brad T.

In the 2008 memo, the PA Department of Revenue looked at when assigning deals gets taxed. Say a seller and a wholesaler make a deal for $2 million. Then the wholesaler assigns this deal to a buyer for $3 million. The buyer ends up buying the property for $3 million.

So, what gets taxed? If we don't tax the assignment, it's $3 million. But the Department says sometimes this assignment should be taxed. They argue it's really two sales – first to the wholesaler for $2 million, then to the buyer for $3 million. That makes it $5 million.

If you are asking your situation falls under that sometimes situation, folks on BP cannot answer that for you. It depends on the actual facts.

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.