All Forum Posts by: Jenifer Levini

Hi, I'm a real estate attorney in California. This thread disturbs me and gives me hope. Clearly there are some people who talk about legal questions with some familiarity, while others are FOS. @Jameson Sullivan your initial question didnt even explain why youre forming an LLC, how complicated your situation is, how much you own in terms of personal assets and other business assets that need to be protected, what are your source of funds, how much legal guidance you need in operating your real estate business,... These are important considerations in forming an entity and whether you are able to do it on your own or should have some professional guidance. It makes no sense to spend money on a website created LLC if you dont really understand how you have to operate your business, set up your banking, write your contracts, interact with vendors, to avoid breaching the LLC veil. A good attorney will explain how you operate your business as part of the LLC package. It like having a caring mother who teaches you how to operate in the world, then pushes you out of the nest.
The person who said insurance is a replacement for an LLC doesnt really understand all the pieces. That's like saying "I removed the windshield, doors and bumper from my car because I got a good insurance policy." The point is that they protect you in different ways. Insurance doesnt keep you from getting bugs in your teeth, and a windshield doesnt pay the bill if you have an accident. But you need them both.

Likewise, insurance doesnt protect and partition off your personal assets if someone is injured on your property. And and LLC doesnt pay for insured loses.

Personally, I think that getting the cheapest LLC formation is a waste of money. If you havent had the whole thing explained to you, hire a good lawyer. Its much cheaper to spend one or two thousand dollars now, then 10 or 20 thousand or more defending a lawsuit.

Jen

Also, not sure how this works in Maryland, but in California a seller must disclose that sort of problem to the buyer. And if the seller doesnt disclose the buyer has legal remedy against the seller for return of the sales price and other damages (all the other money spent to discover the problem).

Alternative uses that might help persuade the neighbor: dog rescue facility, or another animal rescue facility, storage, parking...

In Marin County, California, when the rich neighbors complained about a housing development George Lucas (Star Wars producer) wanted to build, he built low-income housing instead.

Hi @Stan K., I'm a lawyer in SF. Please send me a private note to connect. And then we can have a phone call to see if I'm the right fit for the type of lawyer youre looking for. If not, I may be able to refer you to someone.

Jen

Hello @Meghan O'Connor, Thank you for the announcement here on BP. I would love to connect with this group as I'll be nearby in south Santa Cruz county looking at real estate to develop for a tiny home village. I'm looking for investors for this project.

I suspect that I'll be looking at real estate until the sun goes down around 8:30. Do you think its worthwhile trying to find y'all after that?

@William Morrison makes a good point. The LLC veil is intended to protect the owner of the property from certain liabilities. This doesnt replace having insurance. If you have been sued its important that you seek legal advice ASAP. The fine details of each incident will make the difference.

The Opportunity

The San Francisco and Monterey Bay Areas have some of the most impacted housing markets in the world. This has caused rental prices to skyrocket as demand for housing far exceeds supply. Building housing is difficult because soaring real estate prices and very restrictive zoning laws make it cost prohibitive to create enough housing to keep up with demand when only one large home can be built on each lot. There is a solution - Tiny Homes in villages. Tiny Homes offer people the chance to own custom homes that they move into a community. In the community or village, each home owner pays a space rent & maintains his/her own home.

This model of housing, which is a new type of RV/mobile home park, has not been built in California since the 1970’s. Those who knew how to build these parks have retired.

The History

The reason mobile homes fell out of favor is because the manufacturers built low quality, dangerous housing. For safety, cities and counties created zoning law to prevent building new parks which could become slums. But times and sensibilities have changed. Now, that the low quality has been replaced by the tiny home builders using high quality, natural materials. And many people want the opportunity to live this sustainable lifestyle. My company, Wishomes, already has a waiting list with hundreds of people who want to live in tiny homes.

Who We Are

Very few people will be able to build these parks because of the amount of legal work and red tape. I’m a real estate lawyer. Ive already put in 880 hours going through county, city and state regulations to find the exceptions and which zoning areas will allow parks to be built. Ive also researched the law suits that jurisdictions have fought (and lost) for not providing affordable housing, which is mandated by state law. My partner is a retired mobile home park inspector and general contractor. He has the relationships within the California State Housing & Community Development Department to get responses from the staff. We are moving full steam ahead with building these parks. I believe that we are the only team who will be able to bring this development to fruition with the least number of problems.

The Plan

Our first parks will be in Santa Cruz County. Currently we are meeting with planning commissioners and looking at real estate. We have identified potential properties, and intend to get something under contract within 6 weeks. We have a complete business plan, prospectus and financial spread sheet available.

Investment Details

We are looking for qualified investors, and would like to find some who have experience developing either multifamily housing or on rural land. And some investors can be silent too. The total investment for each park is just under $3M for a MAXIMUM of 10 investors with a minimum investment of $290K each.

Do This Now

If you are a qualified investor interested in learning more about this opportunity, please contact me here on BP, then I'll provide direct contact. Please include information about your investment experience, development experience, and the amount of investment money you can provide for this project. I will send you an NDA, after that is signed, our business plan which explains the opportunity for both cash flow and appreciation, and the risks will follow.

(No thank you, to the hard money lenders, we haven’t reached that need yet. Please don’t contact me.)

Thank you in advance for following up on this opportunity immediately.

Jenifer Levini, Esq.

President

Wishomes, LLC

Website: Wishomes.us

Thank you @Kevin Fox and  

@Brent Coombs  for those responses. I have a complete prospectus for investors who meet our criteria. It will help with a lot of their due diligence. I just wasnt sure about the initial solicitation here on BP, to perk investor's interest. Thanks again!

Jen

I am going to put information about an investment opportunity on BP. How much information should I put in the initial solicitation? Should I include minimum and maximum investment amount? What can go wrong with providing that sort of financial information about the project publicly? 

Thanks!

Jen

Hi Alex, I'm a lawyer in California. I can explain these concepts pretty simply.

In answer to your first question, dont worry about the terms 'single member' or 'disregarded entity.' Neither of those removes the veil that protects you from liability. The entity is disregarded for tax purposes. This means that the entity does not have to file separate taxes. The profits and losses flow directly to you and are included on a separate schedule in your personal tax return. The term 'single member' reflects that there is only one member and that member has 100% ownership, and the Articles of Organization are a lot less complicated.

Since you will be using this property for residential investment purposes, assuming you'll be having tenants in the property, its better to form the entity before you buy. And then buy in the name of the entity. That way if a tenant has a slip and fall on day one, your personal assets are shielded. When you buy a bank may ask for a personal guarantee. That's fine. They need to be able to go after you in case of default. Your LLC isnt (usually) intended to shield you from your lender. The shield is important to protect your assets from tenants, workers on the property, and other things that can go wrong on the property. Those things dont wait for 6 months to go wrong.

Good luck! And I suggest you hire a lawyer in your state to help you form the LLC, answer other legal question, and review your purchase agreement. A few thousand spent up front can prevent tens or hundreds of thousands if something were to go wrong.

Jen