All Forum Posts by: Matthew McNeil

You didn't finish your thought.

Should you sell?

No. 

Should you sell and...   

Maybe.  

What is the cheapest house you've ever purchased?

4000 SQF 2-story SFH for $65k

Why did you buy it?

Seller was a friend who wanted to help me out. I had nothing and he didn't need the money.  

what did you do with it?

I put about $5k into the house; new paint and carpet. Sold it 6 years later for $265k.

Would you do it again?

It was a once in a lifetime deal. Used what I learned and the profit to leverage myself as an REI and built a 7 figure value portfolio.

And you're a moderator? Cut the guy some slack - especially from your position. Geez!

Good questions.  Yes, I've stressed tested and my portfolio is healthy. Can handle vacancies or a downturn in the economy.  Like any good business owner, there are time that strategies need to be deconstructed and reconsidered.  Introspection is always healthy.  Maybe that's where I'm at.  

I'm at a place where I'm wondering if many of the traditional ways of doing things as an investor building a portfolio are ripe for improvement. I can't articulate it, but I can explain how I feel. I feel like my portfolio has become a bloated truckload of assets (each of which are cash-flowing), but there's something missing. The image I have in my mind is that of a giant ocean going vessel that displaces millions of tons of water as it moves at a slow pace towards its destination. Have I reached the metaphorical "mid-life crisis" of being a REI? Is there a critical mass each of us inevitably reach where we need some outside intervention; such as a mentor that can help us re-purpose that slow ship into something that can cut through the water more effectively?

Anyone else relate, or is it just me?

20% down = 4.75% with 1.5 points. Fixed 30 years is decent. That's what I got on my last loan which I closed on last month.  I used Academy Mortgage.  

The lender can exercise the "due on sale" clause if the name(s) of the buyer are not the same name(s) as the members identified as the owners of the LLC. For clarity; as with a trust, lenders do not exercise the "due on transfer/sale" clause when real property is transferred to the SAME individuals in an official capacity (e.g. Joe and Jane Smith as trustees of Smith Trust). Typically, the same applies to LLCs where you and your spouse are sole members (single or multiple member LLC).

If you take out a mortgage personally and transfer the property to your LLC that you control, you should be exempt. Also, if your loan was conventional; Fannie Mae recognizes the legitimacy of a QC between the mortgage holders and the LLC so long as the LLC is controlled by the borrowers;

If the property was owned prior to closing by a limited liability corporation (LLC) that is majority-owned or controlled by the borrower(s), the time it was held by the LLC may be counted towards meeting the borrower’s six-month ownership requirement. (In order to close the refinance transaction, ownership must be transferred out of the LLC and into the name of the individual borrower(s). See for additional details.)

I believe Freddie Mac follows suit. Here’s a BP post on the same topic;

Regardless, you should always talk to your lender and tell them exactly what you’re planning and get their approval.

Next is to check with the Title Company regarding the Title insurance. Generally, the coverage of the policy will state; “The coverage of this policy shall continue in force as of Date of Policy in favor of an Insured after acquisition of the Title by an Insured or after conveyance by an Insured, but only so long as the Insured retains an estate or interest in the Land, or holds an obligation secured by a purchase money Mortgage given by a purchaser from the Insured, or only so long as the Insured shall have liability by reason of warranties in any transfer or conveyance of the Title.”

Again, as with the question regarding the lender mentioned above, its best to ask your Title company if the insurance coverage remains intact if the asset is transferred.

I am not a lawyer and this is not professional advice.

 I see this question asked more and more often in various articles and blogs.  Its certainly intriguing, but comes with pros and cons.  Not sure what geographic area you're thinking of.  You mentioned Bali. Been there. Awesome!  Lots of Australians.  I've lived in SE Asia for years. I find the nationals of most SE Asian countries are wonderful people.  Retiring reality; the honeymoon feeling of an immersion into new sights and smells eventually wears off.  Granted, the power of the dollar that works to your advantage remains a constant source of leverage, which is a plus.  However, and this is where the reality checks in.  The locals are awesome, but the government systems are generally broken and the need to navigate through those systems can be incredibly daunting to the point that that alone causes significant cultural fatigue. Finally, although there are laws on the books they don't protect you to the degree you expect in the US.  And ultimately, you are and always will be a foreigner in the host country.  I've personally witnessed many Americans who couldn't make it living in a foreign country and went home frustrated.  But those who did well have two important characteristics; they have tenacity and they are relationally oriented people. 

I made the same conclusion over a year ago. One more comment I'll add that you don't see mentioned very often regarding asset protection; LTV. If your LTV is relatively high (let's say above 65% - although 65 wouldn't be considered "high") there's not enough meat left on the bones after your lender takes their first position portion if the asset is forced to be sold. Also, as is probably mentioned in a previous post; if your net worth is less than a million dollars then you really don't need what Anderson is offering especially if you carry enough liability insurance. Finally, if you're proactive in following the proper rules for the management of an LLC then you can't be guilty of piercing the veil in order to protect that asset.

I've done it many times from overseas. What @Wayne Brooks wrote is correct. Assign a POA and have the docs notarized before a consular official at the nearest US embassy. Note, however, that the POA must include the actual physical description of the property that your POA is signing for. The Title Company can prepare the document for you or they may have a downloadable template on their website. Finally, the consular official isn't involved in the closing process. They are only officially witnessing that you are the person signing the POA document, the they "seal" or rivet the document. You can PM me for more info if you want.