All Forum Posts by: Edward Schenkel

 One other thought too. If you provide seller financing, make sure you are a named insured on the insurance certificate like a regular bank. 

 Hey Joe, how are you. The question is more of a business question in my opinion than a legal question but I will try to provide some value. There is no law in CT that I am aware of that will prevent you from providing owner financing to builder who wants to develop your lot. However, I think if you decide to do this, you should get some money up front combined with owner financing so you have some skin in the game so to speak. If you need to foreclose, that will take time and money, etc. so you want to have some initial equity. Also, I have done complicated owner financed deals for clients and one issue I see with this deal is that as lender, you want to make sure you have the right to review and approve what the new owner will do with the property. This will help you to make certain that your loan will secure adequate value. In other words, you do not want the new owner to build something that you think may not create enough value to satisfy your debt if you need to foreclose. There are other issues I see too, but this is a big one. 

In deciding whether to do owner financing v. a traditional closing where the buyer gets a bank loan is really a business call. For example, you can make money off the interest if you do owner financing where you will not receive this benefit if you do a standard closing where the buyer uses a bank loan. However, owner financing typically involves more risk as you will need to foreclose if the new buyer defaults. Can the new buyer even do the deal unless you provide owner financing? these are things to consider when deciding whether to do owner financing v. bank loan. Does this help?

Ed

 Greg, to be honest, I cannot help you with this one. I do not have enough experience in tax. I think this is more of a question for an accountant. Good luck. 

 I would recommend several things. First, call your local bar and ask them whether there have been any recent seminars on real estate law. They may have materials. Second, I would suggest going to your law library and asking for treatises on those topics (make sure they are current. Third, I would check the court for resources. Last, Bigger Pockets is a great resource :)

William Joseph, the appeals generally stays the sale with very few exceptions. For example, a party can move the court to remove the stay and allow the sale to go forward. If there is a valid appeal and the stay is in place, the Committee should not hold the auction. Is the committee still going to hold the auction? What is the docket number of the case, I can look it up.

Hey guys, I will try to post weekly tips. I think I will post weekly real estate tips on topics such as contracts, leases, mitigating risk as a landlord, land use permits, and real estate litigation (e.g. foreclosure, eviction, etc.). What does everyone think? Also, keep asking questions, there have been some really good ones.

The general answer is yes, if you are the solo member of a LLC you may not be held personally liable; only the LLC can be found liable. However, there are exceptions. There is a legal doctrine called "piercing the corporate veil" in which in certain rare circumstances, a member can be found to be personally liable. For example, if the member intermingles personal assets with the LLC's assets (eg. shared bank account, personal and business), one can try to make an argument to pierce the corporate veil to get to the sole member. This is why it is important to keep personal and business assets separate. There are a couple other rare exceptions too. For example, intentional torts are generally not insulated by the LLC. For example, you cannot punch a tenant and claim protection by the LLC! There are a few other exceptions too. But the general rule is that if you are the sole member of a LLC, you cannot be held personally liable. If you want to give me a specific fact pattern, message me privately.

The answer to the second question re the title company check - I am not sure. You would have to call the title company.

Please check with the secretary of the state of your state to confirm this. This is the case for Connecticut and other states. Also, in some states you may have to record the trust document, but in most you do not. So you need to check these things out before you do it in your state (again, I only practice in CT and a little bit in NY).

So, if you set it up properly, the LLC holds title to the property and if anyone went to research the member of the LLC at the secretary of the state's office, they would only find the name of the trust and nothing else. Your anonymity would be preserved.

Second, you cannot set up a trust where you alone are the settlor (creator of the trust), the trustee, AND the beneficiary. Therefore, you will need to have trusted people serve as the settlor and trustee and you can be the beneficiary (or you can be the settlor and a trusted family member or friend can be the beneficiary). Message me for any specific questions about setting up the trust.

My opinion about the land trust and LLC structure is that it is a good way to preserve anonymity. Essentially, you set up the LLC and the trust is the sole member of the LLC. I have set this structure up for clients in the past but a couple things to keep in mind. First, you need to make sure that in your state you do not have to file the trust document anywhere like the land records or secretary of state when you set this structure up. In Connecticut, you do not. All you need to do is list the name of the Trust on the LLC incorporating document and that is sufficient.

The answer to your question is I have only closed deals for clients abroad by POA with no bank involved. If the bank is involved, the bank must approve closing by power of attorney for a client who is abroad. I hope I read your question correctly; if I did not, let me know. If I did not, I think at least this response added some value about power of attorneys for the BP community!

Your question is whether I have purchased real estate for clients abroad using a trust and or Power of Attorney (POA = Power of attorney for those not familiar with legalise). The answer is I have only once encountered closing by POA for a client who was abroad, but a bank was not used. Here is a valuable bit of information for the forum about power of attorney in another country - If you are executing a power of attorney in a foreign country, it must comply with that country's laws regarding power of attorney. It does not matter if it only complies with your state's laws. For example, if I wanted to close by power of attorney for a client in France, he would need to execute a power of attorney that complied with France's laws (and Connecticut law). That is the only way it would be valid. He would then have to get me the original power of attorney to record. Similarly, if you are signing a power of attorney in California to close a deal in CT, the power of attorney must comply with CA law.