All Forum Posts by: David Miller

Lease controls. Check State laws regarding what deductions from a residential lease security deposit are allowable - some states have restrictions. If you keep rent paid it should be for damages you have incurred due to the breach of the lease...penalties are generally not enforceable under contract law.

Business entity - probably LLC - with a well written operating agreement that governs each parties' rights and obligations, management authority, spells out how money is spent and distributed, dictates how decisions are made and what type of consent is necessary for different types of decisions, includes buy-sell provisions in the event of a dispute, death, divorce or disability, etc. etc. etc. if you decide to own it individually as tenants in common, you need a property management and ownership agreement that addresses similar issues outlined above. Understand the impact that different ownership types will have on procuring financing. Now I will say it: go talk to a good attorney who can draft documents based on your and your partners' goals and circumstances.

Jordan - PM me. I work in the Triangle and do MF work. Will be happy to connect you with some people. David

Eric Rifkin Let's connect. I am in the Triangle and do a lot of work with builders and developers.

The seller entity (in Illinois) can retain their own lawyer. The purchase contract should provide that they have authority to enter into the sale and complete the transaction and that they will provide documentation to evidence the same (certificate of good standing, corporate resolutions, etc). You should seek an attorney licensed in Texas to assist with the purchase. Your LLC can be setup wherever you like - it may be beneficial to set it up in Texas but you may prefer NY. Delaware is a favorite location for a lot of investors. Regardless, I would recommend (but many on BP will disagree) that you have an attorney assist with the initial setup and advise you on the corporate formalities you need to maintain for your purchasing entity.

Jacob Pereira 1. It is common and a lot of people take the risk because most lenders either don't catch it or as you indicate have no incentive to call a performing note. There was a recent post on BP by someone who's lender called the note after they transferred the property into a LLC in this manner. 2. Sounds good. 3. I would want to make sure tax related items are clearly defined - ask your CPA to take a look. 4. Ask for as much as they will give. You just want to ensure both of you are financially stable and able to carry your load.

Ask your lawyer and the bank about a hypothecation - it involves one party who is not the debtor on a promissory note (you and your wife) pledging property they own (your 1/2 interest in the property) as collateral for the debt of another (the parents). If you reach out to enough banks, you can probably find one willing to do a hypothecation.

1. Transfer of property from your partner individually to the LLC will almost certainly trigger the due on sale clause for the mortgage and could result in an acceleration of the outstanding balance owed. A lot of people take that risk - just understand it is a risk. 2. If your partner transfers the property into the LLC of which you have a 50% interest, what is the consideration for your 50% interest? Your partner needs to make sure it is not a gift to you. 3. What happens if one of you die? Becomes disabled? If you and your partner reach an impasse? What if one of you is married and get divorced - what interest or potential claim could the spouse have in the LLC? Make sure these issues are addressed in the LLC's operating agreement. 4. What financial information, if any, do you need to disclose to another? What information, if any, is confidential?

If it is a tax foreclosure, the rules of the game are slightly different.  As @Chris Martin states, a 10% deposit is necessary, but the 10-day upset bid process remains the same and the financing issues mentioned above remain the same.  @Carmen Harris I would be interested to hear if you close this transaction.

Ruben Guerrero depending on the investors and the deal size, i see acquisition fees between 0.5 to 1%. Management fees I see are often 0.5% or less (although I have seen a few where it is higher). Most of the syndications I work on are multifamily.