All Forum Posts by: Dylan Shea

@Thomas J Mele - sorry for the delay was away on vacation. If you're looking for a bank to handle your team's LLC, then any is fine, although you may want to establish a banking relationship with a lending institution that services the type of deal you may want to handle on your own with your holding/operational LLC - i.e. buy and hold SFR/MF, fix and flip, or ground up construction. If it's particular for the JV you intend to form with other money partners, then this should definitely be shopped for the lender that will best service your intended deal type. You can always message me directly.

@Wenda Wang the acquisition take down could be cash or bridge, but obviously the bulk of the loan monies would go towards construction hard/soft costs. If there was a mortgage on the property, it would only complicate the paperwork, as parcel by parcel would need to be released from the lien of the mortgage, as they were sold off to homeowners. If an LOC was possible based upon the assets of the principal team member, it would make it very streamlined.

John - what does the lease say? That almost always gives the details of the notice requirements, and if there are any issues with change of landlord interests. Usually, unless the Tenant is involved in the transaction some how, then as part of the post-closing process, the notice is mailed out in accordance with the notice provisions of the lease.

Assuming this is in connection to a private mortgage? Contact a local attorney. Happy to give a recommendation if you need one. 

Hey BP community. I'm looking to get a line of credit to buy and build out an 8-lot subdivision, in SW Florida. The total line would need to be about $4mm. Please let me know if you've worked with any reputable companies that you could recommend. Thanks!

Those terms are often used very loosely by the listing agents. The listing that says "non-conforming 4-plex" or "non-conforming STR (short term rental)" may actually be an illegal use prohibited by the current zoning or land use code. Generally the term "non-conforming" or "grandfathered" means it was allowed (i.e. legal and conforming) at some prior time, but doesn't meet the current requirements for such same use. This could be for one of numerous reasons: lot size is too small, or the zoning has changed altogether, or it doesn't conform to the construction requirements for such use (think the large house with a single front door, but multiple "apartments" inside. Each municipality will also have their own specific requirements for what happens in the event of a casualty where all or a portion of the building is destroyed. Some will require that if greater than X% is damages (say 50%), you'll be required to come into full conformance with the building and zoning code. Others will say you have the right to build back 100% so long as you match exactly what was existing, but usually (actually almost always) according to the new building code. Determine whether your location is governed by the city or county and then search that place in Municode - I've included the link for Los Angeles County below (although you should call the city/county and confirm this is the correct governing municipality).

https://library.municode.com/c...

In hot markets, these differences usually don't matter as much as investors are happy to get their hands on just about anything, but in down markets it becomes a bigger deal, and this can also cause issues with getting insurance. Hope this helps some.

You may want to reach out to @Parker H Matson. He does some work on the east coast and is easy to work with.

I second what the others have stated - not much need for an attorney on your initial/first LLC. They are pretty straight forward if you use one of the pre-packaged online services. If you want or need greater sophistication to change the LLC Agreement later on, that can always be done and/or reviewed by an attorney pretty easily. In addition to the cost to register and annual fee, each state offers different anonymity - i.e. some states like DE will make very little information readily available to the public (or available only after payment of a fee), while other states, like FL will at a minimum include and make available to the public the annual filings and the original Articles of Organization on their website. Also note that to get a bank account, you'll need an EIN. Most do-it-yourself services will help you obtain this as part of the package they offer, but if you just file the articles yourself, you'll need to go through the the additional step of applying with IRS to get your EIN.

Another suggestion - is if you're just getting into the game, and you don't have a ton of capital to pay legal fees and check down on offering regulations, is to source friends & family money. I would still document with an entity/partnership, but you can probably get off the ground with 1-off partnerships on each deal without getting in to all the regulations. I would make sure you are set up as an LLC between you and your partner. Then what many people do is set up individual JVs for each project. That gives you the flexibility to feel out your money partners, prove your concept, make some money and then scale up to actually pool investor capital. Hope that helps.

@Hersh Rai, interested in the progress you have made on this. I'm in the process of underwriting a few condo/short term rental developments and would love to compare notes.