All Forum Posts by: Matt Shields

Instead of selling some of my flip houses in Arizona, I would like to refinance them out of short-term hard money into long-term rentals using the BRRR strategy. The problem is that I don't have a real job or W2 and can't get a conventional mortgage. Does anyone know of a private long-term lender for buy and hold? Thanks.

Landlord fires shots at home on Detroit's east side while trying to evict tenants

I look at it a little differently, people will have more money for housing, but auto-driving cars are certainly going to change things. Some of those things will depend on if cars become shared where people just order them on demand through a subscription service, then not only will parking lots be developed but a lot of home garage space will be too. But I believe many people will still want to own their own vehicles. I can see personal rolling living rooms, offices, and mancave's, with people relaxing in the back while the auto deals with driving. 

The impact will be huge. Will there be a trend back to the suburbs since you can work or kick back while you are driven to the office? What about the motel industry? Imagine going to sleep at night in Phoenix and waking up in the morning in San Degio. I can see RV sales booming.  The bar business may bounce back. Will the jobs created be enough to replace all of the Uber, taxi, truck drivers, and the positions that support them? If not, how will the new unemployed affect housing? 

It will be an interesting time. I love technology, hate idiot Phoenix drivers, and look forward to the day that I can take a nap in the back while being driven home, not having to worry about Betty t-boning me in the intersection because she was texting Susie about her cheating boyfriend. But I also understand the dark side of tech that is coming with it.

Why should I? 

For liability protection and sometimes tax purposes. 

How do I?

You can do it yourself, it isn't all that difficult in most states. You can have an online service do it for you on the cheap. Some accountants provide this service. Or you can have your attorney create it.

Some lenders allow transfer to an LLC with lendee members. Right now, with low interest rates, as long as you pay them they usually don't care. But if interest rates rise a lot, I could see the banksters looking for wraps and other transfers, then use do on sale clauses to force refinances into higher rates. So get any approval in writing.

I would recommend running it past your attorney and accountant. There is no one best way, and different locations, finances, and personal situations can determine your best liability and tax protection. You don't want to have to go back and unwind a wrong plan. I made this mistake and paid an obscene amount in taxes that I could have avoided if I would have asked my accountant first. Good luck.

Usually, pre-possession is a bad idea. If they move their things into the property and you don't get approval you may have to evict your new "tenants", and depending on the laws there you may be responsible for their property for a period of time. (leases cannot supersede laws). 

I had a friend who let a nice, professional, businessman into his condo pre-possession. He wore a suit and drove a luxury car.  His company was transferring him to Arizona and he just needed a few days to transfer the funds. Turned out that he was a professional vagrant who moved in and never paid anything. He understood landlord/tenant law better than my friend and was waiting for him to violate the law so he could sue. He created several delays for the eviction, so it took months to get him out, and when he finally got his condo back it was completely trashed with many stolen things. Good luck.

HUD requires the use of a real estate broker that is registered with HUD. They will be able to answer all of your questions and assist you with bids. Find one here: Find A Registered HUD Broker

Good luck.

Being in Southern Arizona I don't know much about logging, but I have done a lot of land sales. Off the top of my head, I would want to know about zoning, dividable, legal access, physical access, road agreements, easements, floodplains, utility access, wells, well agreements, setbacks, environmental issues, and soil tests. If you are planning to sell it I would advise finding a local land (not residential) agent who can help value the property, choose the best lot, and maximise its value. Good luck.

Be very careful hiring contractors, it is the hardest part of this business. I would advise getting estimates from several contractors and check their references. Put together a scope of work with payment timelines, never pay them up front! 

Also, be careful of hiring unlicensed contractors, in some states its illegal. Here in Arizona, if you pay an unlicensed contractor over $1000 for work on a property that you are going to resell or rent it is contracting without a license (The contractor and you) which is a class 1 misdemeanor with up to six months in jail and a minimum $1000 fine for a first offense. Good luck.

Check and see if your state has requirements for licensing of handymen. Here in Arizona, we have a handyman exception that allows for work up to $1000 including materials on each property. Above $1000 requires a licensed contractor if the property is going to be for sale or rent. Good luck.

I don't see why you couldn't, it's just an entity, but I don't get the benefit. Also, have you asked your lender if you can switch ownership to an LLC. I just asked BofA about it, and they told me that as long as I owned the LLC and kept sending money to them they were OK with it. I understand your concern, right now the banks don't care, but if interest rates start going up a lot I could see the banksters looking for wraps and ownership transfers to accelerate loans and force them to refinance into higher rates, so get permission in writing. Again, I'm not an attorney and I would recommend running it past a legal professional.