All Forum Posts by: David Miller

If you do a commercial loan, your dad will guarantee it. Presumably title and the loan will be in the LLC's name but the loan could be in your dad's name. Talk with a mortgage broker or your banker to see what options are available.

You can expect investors will want a preferred return of 8-12% that is paid out before you as the sponsor get any promote. It appears you are also getting into securities that will require you meet the applicable exemptions under Rule 506 of Regulation D of the Securities Act. In your case, it sounds like a Rule 506(b) exemption may be appropriate. Feel free to reach out if you want to talk.

See NC General Statute 28A-17-9. Contract remains enforceable. Seller's son needs to meet with an estate attorney. You need to meet with a real estate attorney familiar with the estate administration process. You can close while the estate is still open but you need to jump through some hoops first.

Ruben Guerrero I say well done to Jeff Greenberg for building enough trust with his investors and expertise to syndicate with no equity in the deal. That said, I find that arrangement to be the exception to the rule and in general a sponsor with no equity in the deal is a big red flag. If you are short on capital, you might structure the deal such that any acquisition or management or other fees you receive as sponsor must be put toward your equity position. An investor might also be willing to loan you the capital which you can pay back over time with interest or perhaps through a preferred return via your waterfall.

Jay Hinrichs in my experience, most bids at the f/c sale or maybe one upset bid ends up being the winning bid. But I have seen several properties go through 10+ upset bids...typically between two parties who get in a raising war. That can delay closing for months but the creditor does not mind as the purchase price ends up well north of the initial bid.

You need to talk with a real estate or probate attorney. A few big items at this point: (1) is title vested in the estate of the deceased or the deceased's heirs? Not every state is the same. If the former, who has authority to enter into a purchase contract and convey title and what steps, if any, do they need to take in the estate administration process prior to or concurrently with the sale of the property? If the latter, do you also need any spouses of the heirs to waive marital rights in order to transfer the property? (2) do any notices to creditors need to be sent or published before the property can be sold? (3) if the estate is insolvent, do you have to jump through any special hoops in probate or with creditors in order to take title to the property?

If you buy via a foreclosure sale in NC and you are the high bidder, you will need to deposit 5% of your bid with the clerk of court in the county where the property is located. Your bid will be subject to a 10-day "upset bid" period where any buyer can bid up your price by the greater of $750 or 5% and then deposit 5% of that new price. That restarts the upset bid period for another 10 days. That process continues until no upset bids are filed for 10 days. As others have mentioned, if you purchase through an online auction, you will have to abide by the auctioneer's rules but you are going to need funds to make an initial deposit. A hard money loan may be an option to secure purchase monies for the property but it will be difficult for the initial deposit unless you have some other acceptable collateral to pledge as security for that loan before you take title to the property.

I would recommend you read Commercial Mortgages 101 by Michael Reinhard. Short read but packed with some really useful and practical information.

If there is a bankruptcy, you need to be very diligent about understanding the impact that could have on a transfer of the property by the owner and what role, if any, the bankruptcy trustee will play in your proposed settling of certain debts of the debtor.

Yvette Alasti if you are pursuing any commercial real estate deals, I would be happy to discuss them with you. On an accountant, try Jake Schachle with Ball & Minor. He has experience working with RE investors.