All Forum Posts by: Caroline Gerardo

@Paul Merriwether  Living Trust avoids probate, a probate trustee appointed who eats the assets, and delays. In CA today and this can change as Prop 13  and 19 are being attacked... etc... and new ways to tax us...  

Step-up in basis, or stepped-up basis for a REVOCABLE TRUST is what happens when the price of an inherited asset on the date of the decedent's death is above its original purchase price. The tax code allows for the raising of the cost basis to the higher price, minimizing the capital gains taxes owed if the asset is sold later. So say you alone bought for $100000 in 1980 and it's worth 2 million when you die in 2023, that 2 million is the new basis it doesn't matter if your heirs live in the property. The original cost is erased per se. If heirs sell for same price, no taxes. Now if heirs hold it another 20 years we have no idea what the law will be in the future.

Heirs residency has nothing to do with this. You are confusing with the exclusions. I wrote more about this here with ten citations to read. https://cgbarbeau.blogspot.com/2024/01/california-living-tru... I am not an attorney but have read 4000 living trusts and have a few for myself. NOTHING ON BP should be considered legal advice. 

Joint tenant vesting in California has some catches. Holding a home in joint tenancy with a spouse, the surviving spouse retains the original cost basis on 50% of the home instead of getting a step-up in basis on the entire home

If you own a home with your child as joint tenants, your child will only receive a step up in basis on your half of the value of the home when you die, this is another complex layer...

75% cash out is the norm. I ran a AVM on it comes to $166000 which won't account for anything special upgrades. $123500 isn't going to get all you invested back, and there will surely be a prepay penalty as lenders think you will continue to try and sell. Was garage conversion permitted? 

If you have large reserves or long track record you probably can get 80% LTV cash out with a 3 year prepay and the rate increased for the exception. Can you hold three years? Can it rent for $1300- 1400 ?? I think rent survey is going to say $1250 which is too low for $132,800 loan with tax and insurance payment is $1319... devil is in the numbers

@Christie Gahan  syndications attracted fraud actors. 

Sorry I read your comment to get an EIN before you apply would somehow help a person with an LLC not be "seen."

two choices: 1.set up a FinCEN ID4 or 2. Foreign pooled investment vehicle then

• a. EIN  b. SSN/ITIN  c. Foreign
• You have to next step give your social security# or tax ID, address where you file, AND passport, driver's license...
• so giving an EIN does not keep your name, address, date of birth, country of origin etc... out of the system.
• A tax ID leads to the filer who is a human. 
• All these companies that charge to hold your LLC secret: Legal Zoom/Northwest/ZenBusiness/INCFILE/Rocketlawyer have to find a new angle.
• The tool will be available to lookup in 2024. Who is granted access? A court order, law enforcement of all types (yes you saw on TV how a dude gets his "police" friend to type in their search on anyone), tax people, mine government... 
• then all the hackers who are already in these systems can ransomware or just post it on the internet.

Quote from @Shafi Noss:

Quote from @Caroline Gerardo:

Furniture for Sale From Luxury LLC Corp. $1.

Sorry to tell all the cottage industry attorneys and gurus on BP that owning or vesting in a LLC no longer keeps your identity secret. It really never did. If you applied for a mortgage with the LLC it's publicly registered. And everything digital can be accessed or hacked.

Beneficial ownership reporting is a requirement from the Financial Crimes Enforcement Network (FinCEN). This is the U.S. government's efforts to prevent money laundering, financing of terrorism, tax fraud, and other illegal acts. Beneficial ownership reporting requires those with control over businesses or legal entities to provide identifying information. 

This information includes: Full legal name, Date Of Birth, Residential Address, Unique identifying number from a non-expired US passport, state identification document or driver's license, social security number, ITIN number, or foreign passport.

Reporting companies must file their initial reports electronically through FinCEN's Beneficial Ownership Secure System (BOSS). Reporting companies created or registered to do business in the United States before January 1, 2024 must file by January 1, 2025. A beneficial owner is a person who enjoys the benefits of ownership even though the title to some form of property is in another name.

A court can subpoena the name, address, DOB, driver's license/passport or ITIN or Social security number thus exposing your asset protection plan.

Twenty three types of entities are exempt from the beneficial ownership information reporting requirements. 

These entities include:

• Publicly traded companies meeting specified requirements- you know those on the stock market
• Many nonprofits but not all- the not for profit has to be approved, filed, and registered with IRS and the state.
• Certain large operating companies

Other entities that are exempt from BOI reporting include:

• Sole proprietorships
• Unincorporated associations such as HOA's
• Estates
• Family trusts includes Revocable Living Trusts
• Natural persons opening accounts on their own behalf a human who uses their real name
• Trusts (other than statutory trusts created by a filing with the Secretary of State or similar office)
• Authorized users for credit cards, your children on your VISA card
• I wrote 50 times to vest in Living Trusts and save the filing costs, keeping money separate, and paying for extra tax returns and attorney fees. Now here is another piece of evidence why not to bother with Asset Protection Schemes. 
• Caroline Gerardo
• NMLS 324982
• opinions are my own

Once you incorporate only an attorney can represent you in court, you can't represent yourself, even for a single member LLC. Another disadvantage of having an LLC. 

A Living Trust is not expensive to set up. 1. decide who is in charge 2. decide who gets what percent of the assets when you die 3. list the asset.  You could find online forms and set up single property or asset living trusts for free. Then the whole form which is witnessed and sometimes notarized (depends on state) is placed in safe deposit box. When you apply for a loan a copy is provided to complete a Trust Certification often done by the Title Officer as part of the closing. Title then is recorded in the trust. 

The advantage to Living Trust is your heirs are protected from $$ tax stepped up.  You can name the trust the same as the property address.  Hazard insurance loss payee is in same name, bank account as well. 

You also want a will that is mentioned in the trust to have more details. The will DOES NOT go to lenders or Title Company unless the Trustee Died.

EIN will not help you.

Furniture for Sale From Luxury LLC Corp. $1.

Sorry to tell all the cottage industry attorneys and gurus on BP that owning or vesting in a LLC no longer keeps your identity secret. It really never did. If you applied for a mortgage with the LLC it's publicly registered. And everything digital can be accessed or hacked.

Beneficial ownership reporting is a requirement from the Financial Crimes Enforcement Network (FinCEN). This is the U.S. government's efforts to prevent money laundering, financing of terrorism, tax fraud, and other illegal acts. Beneficial ownership reporting requires those with control over businesses or legal entities to provide identifying information. 

This information includes: Full legal name, Date Of Birth, Residential Address, Unique identifying number from a non-expired US passport, state identification document or driver's license, social security number, ITIN number, or foreign passport.

Reporting companies must file their initial reports electronically through FinCEN's Beneficial Ownership Secure System (BOSS). Reporting companies created or registered to do business in the United States before January 1, 2024 must file by January 1, 2025. A beneficial owner is a person who enjoys the benefits of ownership even though the title to some form of property is in another name.

A court can subpoena the name, address, DOB, driver's license/passport or ITIN or Social security number thus exposing your asset protection plan.

Twenty three types of entities are exempt from the beneficial ownership information reporting requirements. 

These entities include:

• Publicly traded companies meeting specified requirements- you know those on the stock market
• Many nonprofits but not all- the not for profit has to be approved, filed, and registered with IRS and the state.
• Certain large operating companies

Other entities that are exempt from BOI reporting include:

• Sole proprietorships
• Unincorporated associations such as HOA's
• Estates
• Family trusts includes Revocable Living Trusts
• Natural persons opening accounts on their own behalf a human who uses their real name
• Trusts (other than statutory trusts created by a filing with the Secretary of State or similar office)
• Authorized users for credit cards, your children on your VISA card
• I wrote 50 times to vest in Living Trusts and save the filing costs, keeping money separate, and paying for extra tax returns and attorney fees. Now here is another piece of evidence why not to bother with Asset Protection Schemes. 
• Caroline Gerardo
• NMLS 324982
• opinions are my own

Recourse 30 year term 7-8% rate if property is ready to lease 20% down FICO high desirable location, investor knows what they are doing.

Non recourse priced like hard money shorter term 24 months- 5 year term rates 11%-22%  some are only 50% loan to value or half down payment from your fund. 

I see others answering not reading that you CANNOT be a borrower with your fund source. BIG difference in the details. NO RECOURSE loans to a self directed deal mean NO FICO is used, no HUMAN involved, no person guarantees WAY different than NONQM or DSCR for 1-4. @Bryan Hartlen a number of people gave you WRONG answers.

My list. I DO NOT Broker these as the fees and rates are way to high for my blood. Most of these are short term and you have to keep refinancing or sell or payoff. Non owner only 1-4 units in location they like. I can give you phone numbers I do not make any referral fees and charge them nothing but a hug when I go to some conference.

North American Savings this is not a regular bank they loan in AZ expect 50% LTV on a prime property with 4 points 14% rate for five years. has a prepay

Solara  does AZ 65% ltv 2-3 points 11% rate for 5 year then due and payable. 

Marshall REddick/ Pac Crest/ Axos all at 50% LTV 3-4 points 5 year terms 12- 15% depending on quality of property and DSCR ratio Jim at JMAC also does in the same range, he's a decent gentleman and answers the phone if you are easy on the eyes (meaning not a pain) 2 points at 12-13 I would call him first in your situation.

In California Coastal I have other referrals at 65%-75% ltv for lower rates. Since these are hard money dudes they charge what they can sell and know what everyone else does. Great property, lower rate, they see what they might recover. Call me for some kinder names.

Follow the rules. Know the restrictions like your front teeth, do not make an exception and have the tax man on your back.

So she paid $100000 and did some maintenance and repairs of guess $50000. The building is only LAND. It's going to take two/three years to get permits, plans and get it rented. She's a protected class so you must be cautious. You say there is a $140000 mortgage if conventional it's amazing they didn't call the loan, or they will. Does she even have hazard insurance on it now?

Offer her $250000 sale price, with owner carry $100000 at 10% 30 year rate, payoff the first- make a deal with servicer it's surely in the default bin of servicers offer them $100000. Get a copy of the note as part of your offer. $100000 loan at 10% $878 is your payment plus  tax and insurance. Apply for construction to permanent owner occupied loan you can borrow 80% of completed value. Apply for construction non owner you can get 70% of completed value. You need plans approved, specs, cost breakdown, licensed contractor in the city all that is going to take 12 months to get it together. Approval probably at month 18. She doesn't owe capital gains on the sale and gets income on the note which she can spread out or give to heirs but your intention is to pay it off in 24-30 months when you get your ducks in a row. You need $200000, good income showing on your IRS taxes full doc, great FICO, and a team to get this completed. Assume everything that sits on the site will be stolen and pan ahead (fencing, security lights, toilets, a big mean dog on site) (down/ closing costs/ pay architect/ attorney to advise on contracts and note and the heirs are going to get involved FOR SURE.  You will need to actually go there to get the work done and supervise. The family member who told her he could fix the leak is your enemy, he's going to strong arm her into giving it to him. 

A vacant house to the studs is a liability - fire, kids parties, theft, injury, possible lawsuit plus she has a mortgage that we guess she pays $1000 a month. The mortgage servicing company calls her three times a week and wants payoff. You offer her $878 monthly check and release from the worry.