All Forum Posts by: David Dachtera

@Trevor Marvin,

You'll want to talk to an attorney familiar with the use of business entities to isolate your personal property from the risks of doing business in Real Estate.

Any deal you do will be subject to the laws of the location where the property is located. Your attorney can explain that as well.

If not, I know of one who can. He's an attorney AND a CPA.

@Kelley Ogletree,

Some thoughts ...

What's "wrong" with your credit? Too much revolving debt? ... some late payments? If your payment record is solid, you might improve your score by reducing revolving credit utilization. Remember, however, that a score is a tool, not a trophy. No one gets approved on score alone. If it's not currently getting you declined, go ahead and pursue your options.

Consider tapping your equity - no need to sell, just look into a HELOC. See what adding that payment would do to your current cash flow situation.

Folks look at STRs and tend to get dollar signs in their eyes forgetting that hospitality is whole business unto itself. You'll need to be able to pay for cleaning / housekeeping, maintenance and management out of your STR income or you'll be doing it yourself (welcome to your new 24x7 job!).

My $0.02 ...

That is a GIGANTIC red flag. Find a proper lender - that's nonsense. 

This is copied-and-pasted directly from a Facebook post. It seems such a good summary of the need-to-do list, I thought it could be helpful ... As always, get competent professional advice on all matters, legal and financial.

Spreading this information for those of you that don’t have your affairs in order. 

Make sure all bank accounts have direct beneficiaries. The beneficiary need only go to the bank with your death certificate and an ID of their own. 

- TOD = Transfer On Death deed if you own a home. Completing this document and filing it with your county saves your heirs THOUSANDS. This document allows you to transfer ownership of your home to your designee. All they need to do is take their ID and your death certificate to the county building and the deed is signed over. Doing this will avoid the home having to go through probate. 

- Living Will: Allows one to put in writing exactly what you want done in the event you cannot speak for yourself when it comes to healthcare decisions 

- Durable Power of Attorney: Allows one to designate a person to make legal decisions if one is no longer competent to do so. 

- Power of Attorney for Healthcare: This document allows one to designate someone to make healthcare decisions for their person. 

- Last Will and Testament: Designates to whom personal belongings will go too.- Funeral Planning Declaration: allows one to say exactly one’s wishes as far as disposition of the body and the services. 

- If the above documents are done, you can AVOID probate. If all the above is not done, you have to open an estate account at the bank. All money that doesn’t have direct beneficiaries goes into this account. You have to have an attorney to open the estate account. The attorney also has to publicize your passing in the newspaper or post publication at the county courthouse, to allow anyone to make a claim on your property. - It’s a complete PAIN. 

- Make a list of all banks and account numbers, all investment institutions with account numbers, lists of credit cards, utility accounts, etc. Leave clear instructions as to how and when these things are paid. Make sure heirs knows where life insurance policies are located. 

- Make 100% sure SOMEONE knows your Apple ID, bank ID account logins and passwords!- Make sure you have titles for all vehicles, campers, etc!

- MOST IMPORTANTLY!!!! - Talk with those closest to you and make all your wishes KNOWN. Talk to those whom you’ve designated, as well as those close to you whom you did not designate. - Do this to explain why your decisions were made and to avoid any lingering questions or hurt feelings. 

Hope this helps! Hope this lights a spark to encourage all your friends and family to take care of these things to make it easier for those we all leave behind!

My hope is that the above list at least helps you start an important conversation with your loved ones.

Question for Agents / brokers ...

When a prospective buyer asks whether a listing is FHA eligible, what alarms go off in your head?

@Emily Fraser,

A credit score is a tool, not a trophy. No one gets accepted based on a credit score. It can, however, get you declined - it's a gatekeeper, not a "golden key".

No one actually has a credit score - the score is associated with a report from an agency. That's why there are multiple scores. It's a snapshot in time. It doesn't change. When a new report is taken it will have a then-current score.

That said, yes - you'll want to look into what changed in your credit file on which agency.

I say ask your attorney what happens to all your "private" information (assets, holdings, etc.) during the discovery phase of litigation and after the case is closed.

Bottom line: If it goes to litigation and your insurance pays out, it means you lost and all your information is now available for anyone who wants to come after you. Your entire estate is now exposed and at risk.

"Control everything, own nothing" is all about insulation from liability.

Ideally, BEFORE you begin your acquisitions, you'll set up a trust with someone you trust as the trustee (whose identity will be a matter of public record with respect to the trust) and you as the beneficiary (whose identity is protected). The trust then forms and owns an S-Corp. The S-Corp and the trust form multi-member LLCs. No entity holding an income-producing asset is owned by a human person.

"But, David, that's SO much expense!" Let me ask one of my favorite questions: How much money can you AFFORD to "save" (not spend)?

My $0.02 ...

The people who have lost their homes due to the situations I listed would likely disagree with you. 

Evictions AREN'T that hard to get! One serious illness ("long COVID" is a good example), one serious injury, one serious tangle with the justice system (prosecution for crime you didn't commit) and you're toast through no fault of your own.

@Jacob Beg,

First, very that she repaid the arrears that got her evicted.

Second, verify her income. Bank statements, etc.

Third, credit score has some meaning, but remember: scores get no one approved, but they can get you declined. It's a gatekeeper, not a trophy. The actual credit report content is what you want to see. Bankruptcies and late payments can drag scores down for years.

If you are still considering her as a tenant after all that, arrange to have her deposit the rent-in-advance in an escrow account. The escrow company can disburse to you monthly

My $0.02 ...