All Forum Posts by: Jerel Ehlert

When in doubt, take the time and find out. 

https://www.law.com/texaslawyer/2020/08/06/get-out-report-finds-1300-illegal-evictions-in-houston-during-covid-19/

What do you think the fallout of illegal evictions will be? This should be interesting to watch. Probably less so to participate.

You need legal representation. A good commercial transactional attorney can provide valuable input to discussions like this. 

"Partnering" is my 2nd most common type of lawsuit that comes to my office (construction making the top of the list). At some point either the money partner will start questioning where funds are going or argue that the split is not right. Or the non-money partner is wondering why they are doing all the work and splitting a lot of profit with someone who sits back and collects on their sweat. 

You see where this goes?

If you want to do this, and it can be great, get a lawyer and do it on a per-deal basis. Get everything spelled out in writing BEFORE there is a profit to fight over. Figure out, in broad strokes, what happens if/when things go sideways. COMMUNICATION is key. Manage expectations.

Honestly, if all you bring to the table is money but you want to learn the flip side, be a private lender (promissory note, deed of trust (because...Texas)) but offer low interest (but DO collect some interest each month) and a split of the net profits (aka, equity kicker). Do construction draws - do NOT give all the rehab money at the closing table unless it is less than $10K. Interest on the note in the 3-6% range, and the equity kicker in the 20-40% range is common. It should work out to be about a 15-20% cash-on-cash return.

Do your due diligence on the people and the property. Get a copy of their driver's license, etc.

I'm only licensed in TX. You have a different type of policy on investment property for the structure and fire hazard. Check what your state's policies are like where the house is located. They set the policies insurance companies are allowed to offer.

IRA accounts have tremendous protections under ERISA. Not saying it can't be done, but I've never heard of a judgment against a retirement account.

Honestly, I doubt you will need much, if any, umbrella policy for IRA investment property. Talk to a lawyer in your state about protection, not an insurance agent.

If the only reason you know this information is through your official duties as a government employee, that will be a problem. Even if you know public info, but have access faster as an employee and not through a FOIA request, that will be a problem.

Lots of people ask questions that have a legal component to the answer. Problem is, the questioner doesn't say where the answer will be applied, and a reasonably correct answer may be very different, depending on the laws where it applies. 

Each state has its own set of laws on real property, entities like LLCs, probate, lending/borrowing, landlord/tenant, commercial notes, usury, foreclosures, evictions, and trusts, just to name a few. Some areas of law are so pervasively regulated by federal law, that federal statutes supersede state law and local statues only apply where federal law is silent or, maybe, completely local (federal preemption). This includes areas of securities regulation. Sometimes there are lots of interplay between state and federal law, like under Dodd-Frank, some consumer law, and Fair Housing.

So, when you post a question in all these wonderful forums, let us know where this is happening (not necessarily where you are), and you will probably get better answers.

Happy investing!

Welcome. There's a Thursday noon (local time) virtual meeting by Harold McGee & Jean Norton. You can get the link by searching Meetup.com for their meeting. Are you in Austin now or just doing remote groundwork?

Something about that just doesn't add up. Let me know if you want to talk more.

Penny foolish...  The economic analysis says to hire a pro.

Scenario: Landlord (LL) does as you suggest - OTC remedy. LL puts new T in property. Neighbor tells T about flees last T had. Now new T says there are still flees. What evidence do you put on for a judge and jury when their lawyer sues? 

If I were defending LL, it becomes easier to kill a lawsuit before it starts if I can send opposing counsel receipts from a professional pest control service and I can tell OC their client is full of **** and they will look like money-grabbing opportunist.  If all I have are receipts for a couple of bug bombs, their case still has life because LL looks like a cheap miser. 

The standard of care is "what would a reasonably prudent person do under the circumstances?" An RPP would spend $200-300 to make sure the job was done right. The alternative is to spend $3000-8000 to settle or defend a suit. The "insurance policy" is that if there is still a suit, and IF they prove flees are causing harm AFTER professional treatment, the pest control gets dragged into the suit for failure to adequately treat. That's why you should use a national brand pest control company or one that has professional liability insurance. If you hire a pro, and its still messed up, they can come out and re-treat or defend you in a suit because you did the right thing.

When there's a trust and an LLC title issues will crop up. In Texas, an LLC cannot be the trustee (you weren't clear on how the two were structured), and throwing them both into the transaction means the underwriter will have questions. The notice letter sounds interesting, but doubt it will have any impact in Texas. Title companies are under no obligation to close if they cannot satisfy themselves of all the issues in schedule C.

A better idea is to work with a fee attorney instead of a title company. The attorneys have more leeway as to what they will accept to reach a legal opinion on the state of title.