All Forum Posts by: Jonathan Herron

@Doug Jones wholesaling is not necessarily illegal in NJ.  The one area to be careful about is how you market your contracts available for assignment.  It is also important to make sure the contract used with the homeowner allows for assignment.  That contract will largely dictate what you are and are not allowed to do as a buyer.

Hi @Cindy Heyward,

Stephen is certainly correct about there being a number of events posted on this site.  There is also the SJREIA which has multiple events throughout the month.  

Feel free to reach out if you have any questions or are looking for any recommendations of any professionals in the area.

Jon

@Joe P.You cannot charge the last month rent when the lease is signed.  New Jersey allows for an eviction on non-payment of rent to be filed pretty much as soon as rent not paid.  The deposit can be up to 1.5x the monthly rent.  

Camden County processes evictions quickly and filing is usually enough to get a tenant to pay that last month's rent.  If you have any other questions feel free to pm me.

@Robert Cacchiola speak with your attorney about next steps.  Nothing described in this post suggests they are doing anything outside the norm.  Time is of the essence letters in NJ typically require 10 days before you can proceed with other options.  

@Malik Batchelor as other attorneys have stated in this post contracts and property law are very state specific.  The best advice is for you to consult a local attorney.  

Vacant land presents different issues than when a structure already exists.  The due diligence period will also need to consider what, if anything, you will be able to build on the land.  Having professional assistance and counsel is very important in such a situation.

@Jason Wu I would probably advise keeping each property in its own LLC/LP with a larger entity either owning the other entity/being the general partner. Transferring property from the entity to a new owner should not be much more burdensome than if you were to own the properties as individuals.

I would advise keeping the property management separate from the properties as an asset protection strategy.  

The advice above is fairly general regarding New Jersey law.  Planning/forming the investment business is very much geared around the specific goals and risk management strategies you would want.

You can have an attorney draft the contract for you.  The requirement for attorney review only exists if you use a realtor supplied contract.  I typically draft contracts for wholesaling which include a provision expressly allowing assignment.  If you use a realtor supplied contract have an attorney on call who can insert the provision during attorney review.

I generally charge a smallish flat fee for what you described which includes the operating agreement, a kovol letter with your accountant, and education about how to make sure the limited liability stays limited liability.  This way your business and tax strategies are tailor-made to your needs/wants versus what the legislature decided.

Forming an LLC, or incorporating, is an asset protection strategy. It does not transfer the risk of liability to anyone else, only the responsible party. It does create a new legal entity who would be the responsible party. The law is in favor of businesses incorporating. If business owners follow the rules piercing the corporate veil is difficult. It is when business owners do not do these things that the veil can be pierced. Hiring a local attorney to form the business will also get you the advice of how to make piercing the veil difficult.

Insurance is a transfer of risk.  The risk of paying out money from losing a lawsuit is transferred to the insurance company in exchange for your premium.  It does not necessarily protect personal assets.

They are different strategies for different goals.  As a business owner, they work together to give you better protection.  I never advise clients to use one over the other but instead use them together for stronger protection.

@Brian Bradley well said. Asset protection, and your particular goals, can typically be done with different strategies. Whether a State allows a foreign series LLC to afford the protection of its home state is one where the expense of litigation, even if you win, might negate using this particular asset protection strategy over others.