All Forum Posts by: Nick Intrieri

Thanks Vincent. Yes it is only a 2 family.

I am worried about "due on sale" if I transfer deed post sale to LLC. I will see what my attorney says. Worst case going to go with a partnership agreement, loan in both names, and the umbrella insurance policy.

Basically my mortgage broker from Wells Fargo told me in so many words, "technically yes they could exercise due on sale but not likely as long as payments are made on time. "

Thanks all for the advice. Option #1 (LLC) is definately the preferred path. However in speaking to my mortgage broker (since this post), his comments: were "They usually only give loans to people, not companies with no credit history." I mentioned the idea of a personal guarantee that I sign off on behalf of the entity. He is going to check with underwriting and see if that's something they can do....but I'm not confident. And I'm not comfortable changing the title after the fact due to the "due on sale" clause.

So my follow up question is how do you initially setup an LLC if you need a loan? Or is that only possible through other funding mechanisms (cash, private money)? Everyone says LLC best way to go in a partnership for real estate business, and I agree.....but it seems impossible to do + conventional financing. Do I need to talk to another bank?

And definately will review operating/partnership agreement with an attorney. Will include clauses for non payment as well as everything else I can think of...

Thanks!!

Hey all - Looking for some friendly advice. About to sign on offer letter on a small multi-family investment property in New Jersey.

I have explored the use of a 50/50 partnership with a good friend of mine who will live in the property and manage it for us. Although I will put up most of the down payment, he will be in charge of managing the property and doing some of the rehabbing. We have set up a payment plan for him to pay me back his portion of down payment and have outlined all responsibilities. 

When it comes to financing, here is where I have a dilemma. Currently, I am personally pre-qualified for a loan through a conventional bank based on my personal net worth and income.  However for a partnership, my options as I understand them from my research are:

1. Setup an LLC with both of us as 50/50 partners. Work with my mortgage broker to either secure the loan under the LLC to start (with my personal income as guarantee) or secure the loan under my name first and transfer deed at a later date (running the risk of "due at sale" clause)

2. Secure the loan under my name; Work up a partnership agreement that splits the expenses and income in the 50/50 arrangement

3. Secure the loan under both of our names. Work up a partnership agreement that splits the expenses and income in the 50/50 arrangement

I prefer #1 but not sure if I can pull it off. Will be talking to my mortgage broker later today...

Any thoughts on this much appreciated!! How do others typically set up partnerships and loans?

Thanks

Nick

Welcome @Zachary Hancock !

I also live near the Jersey City, NJ area. I echo @Sunny Suh words around it is a bit of a difficult market to find deals on MLS. Especially over the past two years where a lot of neighborhoods really exploded and are still pretty hot (See: Jersey City Heights). I still think there are deals out there though, and especially in some in neighboring areas such as Union City & North Bergen.

Good luck, let me know if you'd like to connect. 

Nick

Thanks all, will check that out. 

@Rafael Floresta you are right, I am still looking for my first deal. 

Hello - I'm looking to connect with a wholesaler as a Buy and Hold investor in Jersey City Heights area. Any suggestions on the best way to connect? Have been looking on MLS/Redfin/CL but no great deals on here. In driving around there are deals to be had....not sure if I have the stamina and time with my job for sending out postcards and knocking on doors. Thanks! Nick

Thank you @Hattie Dizmond and @Jeff Trevarthen Your points make a lot of sense. Co-signing sounds like the way to go. 

Basically my college buddy of 12 years and I are looking at a few places to get our feet wet in real estate investing. We both have full time jobs, no plans for any type of real estate LLC. I trust him with my life and money as well. Still, it feels like we should just put down something in writing to make it official on how we will split costs & income. Would that be an operating agreement?

Looking to form a partnership with another newbie investor in my area. This is going to be our first deal together. I am wondering what are the best ways to, legally speaking, to "formalize" so to speak the business relationship? Is it necessary to create an LLC or can we draw up a simple agreement on equity shares and both sign it? How does it work when applying to the bank for a loan?

Thanks all for any advice. I would assume this is a common question but could not find any topics specifically on this. 

Thanks

Nick

Hi Michael - I am a fellow newbie in your area. I live on the border of Jersey City and Union City looking to invest in Hudson County. This is def a great resource, and you can't beat free! 

I think there are some deals around but its a little tougher than rural areas. Have you been to any meet-ups in the area?

-Nick 

Thanks guys! Really appreciate the advice.....this site is the best!