All Forum Posts by: Lorraine Hadden

I would invest early and often in multifamily (5+ Units)!
Get connected to resources!
Live my best life and not worry so much about MAKING MISTAKES!!!
Move on from "tire kickers" - deals that waste time and energy!!!

Is there really a LACK OF AFFORDABLE HOMES nationwide?

Is there a housing shortage or is there really a problem with the BARRIERS caused by productivity, land use, zoning and mandates that limits construction?  The news cycle notes that the limited availability of affordable homes is primarily due to a significant gap between the demand for housing and the supply. I really think we need to have a broader conversation about barriers to new construction in real estate! Take for example the lack of productivity where construction projects often experience time and cost overruns, rework or quality concerns.  Then there's misaligned incentives players in the construction industry may make more money the longer a project takes to get completed.  What about land use and zoning policies that exclude affordable housing or even the high cost of living.

Did you know that since January 1, 2020, California requires new construction homes to have solar panels? It's called The California Solar Mandate - this building code requires new homes to have a solar photovoltaic (PV) system. The system must be large enough to meet the building's annual electricity usage. As of December 2024, the average cost to install a solar panel system in California is $2.31 per watt, including installation. For a 5 kW system, this would cost around $11,563 before incentives. THIS ADDITIONAL MANDATORY CONSTRUCTION COSTS UNDOUBTEDLY GETS PASSED ON TO THE HOMEBUYER!!!

What are your thoughts on the "LACK OF AFFORDABLE HOMES"??

Every married couple in California has a prenuptial agreement, even if they didn't create one! Yep --- It's called CA Community Property Law --- The California Family Code governs all aspects of marriage and divorce, including how assets are divided. Without a prenup, California's community property law dictates that any property acquired during the marriage is considered community property and is divided equally in a divorce. Property owned before marriage, or acquired by gift or inheritance, is considered separate property and belongs exclusively to the spouse who acquired it.

WORD TO THE WISE ----- Keep separate property separate and DO NOT COMINGLE them, if you live in CALIFORNIA or any other community property state - which I believe are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin!

What are some strategies you have used to improve or rebuild credit?

If you had good credit (670-730 range), you have 20% to make a down payment, and sufficient income to qualify for the home you want to purchase - Would you choose the FIRST-TIME HOME BUYER or CONVENTIONAL purchase option...which would you pick and WHY?

@Jennifer Fernéz

By now you probably purchased the property. But I agree with @Stuart Udis - when making offers on occupied rental property, I always review the Financials including the RR & T12. If there is a problematic tenant, I always ask that the property is VACANT @ COE.

If the current owner wants to close, they will have it vacant before we issue a clear to close. We complete a final walk-thru 24-hrs before escrow close to confirm the property is vacant.

Hope that helps!

I would not sign another 1yr lease. I would let my lease convert to month to month and take my time and find a MFR. Live n one unit and rent out the rest.

When I started out, I purchased a SFR then wished I had waited and purchase a MFR live in in one unit, rented out the rest. Then in about 1yr move out to a SFR and rent out the unit I occupied in the MFR.
 

Putting a property into an LLC before placing it in a trust is generally recommended because an LLC provides a stronger layer of asset protection against creditors and lawsuits compared to a trust alone, effectively isolating the property from personal liabilities while still allowing for estate planning benefits through the trust structure; essentially, the LLC acts as a shield to protect the asset within the trust from external claims.

Consider getting professional advice on how to structure your assets to shield and protect the asset(s).

@Armando Carrera, Absolutely!

You need to protect assets from lawsuits or creditors. 

You can - 

1) establish a trust for asset protection, 

2) utilize the Homestead Exemption for property protection, 

3) consider tenancy by the entirety for marital property (this might just be applicable to California, my home state)

4) make sure you have adequate liability insurance for additional protection, 

5) think about forming a business entity to shield assets, 

6) and have proper estate planning for asset distribution.

Seek tax and legal advice from experts in your state.

@Loren Souers

I'm going to lead with the suggestion that you consult a tax professional and an attorney.

Generally speaking, you can put a rental property in a revocable living trust, which can help with estate planning and asset protection. However, there are some drawbacks to putting a rental property in a trust - first setting up a trust can be expensive and involve a lot of paperwork, the rental property may be subject to rent control and liability insurance may be more expensive for a trust. But consult professionals for clarity.

I was going to suggest placing the rental property in an LLC, but, I see that is not an option you would consider.