All Forum Posts by: Matthew McNeil

 Well said.  This is what I'm currently doing.

Hi @Brian Smith.  Welcome to BP.  I've bought, sold, exchanged several SFHs in the Boise/Meridian for the past 10+ years.  Getting ready to buy another one.  Message me if I can answer any particular question or if you need any referrals for agent, PM, attorney, title company, insurance, CPA, etc.  I've developed an amazing team over the years and they've helped me be very successful with my portfolio. Cheers!

What @Nick Schoch wrote...

Respectfully Joshua, I can understand why your spouse and investment partner are getting cold feet.  It took you three separate posts to get all of your numbers out on the table, which included the words "apologies, maybe, hopefully."  I realize you're asking for help, but the premise of your request highlighted the need to provide assurances to your team members.  Their apprehensions are entirely understandable and I'd have felt the same if I listened to you go over the numbers across a table from me. 

Please note that I'm not trying to be dismissive of your request for assistance, but I'd recommend you go back to your calculator and punch in all the numbers and see what figure drops out the bottom. 

I've bought, sold, exhanged several SFHs and this doesn't sound like a great deal. 

4% is a rule of thumb.  It does not apply universally to every individual and unique set of circumstances. Investopedia, Morningstar and others are challenging this rule which was based on research done during a 50-year period from 1926 to 1976. In the book about Warren Buffett called "The Snowball," Alice Schroeder shares an intriguing story Buffett discussed at a workshop when he explained the Dow Jones was at 874.12 in 1964.  17 years later, in 1981, it was at 875.00 - although the economy grew fivefold. There are simply to many variables to base retirement withdraws on the 4% rule.  Interest rates, market downturns or slow periods (as Buffett pointed out), portfolio structure (high risk investment vehicles vs conservative), etc. comprise those variables.  Conclusion, its just a rule of thumb; "The English phrase rule of thumb refers to a principle with broad application that is not intended to be strictly accurate or reliable for every situation."

 There are a lot of members paying attention to these posts although we may not be chiming in.  Its very educational, including the emotionally charged comments.  We need to hear the real and raw comments from people who've been down these roads.  I appreciate that the MODs aren't deleting the "raw" ones.  

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; https://www.biggerpockets.com/forums/49/topics/610831-oh-yeah-the-due-on-sale-clause-is-now-llc-friendly-sometimes

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.

 Perfect example. Makes sense. Thanks Larry!

I would mirror what @Josue Vargas wrote regarding a higher priced SFH. I'd invest the money into a SFH in a western market (I own SFHs in Boise/Meridian). You can cashflow and enjoy appreciation. Currently, home values in the key cities in Idaho are appreciating double digits. Not that apprecation alone needs to be your primary strategy, but it might be worth considering. For example; with 50,000 down you can cashflow $200-250 for this house in Nampa ID using my PM. Home values are increasing 12%. Even if you used a conservative figure (8%) you'd see this house valued at $470,600 in 10 years.

https://www.zillow.com/homes/for_sale/Nampa-ID/fsb...

 Well said Brian.  We need more input like this on BP.  I recall a post written by Jay Hinrichs (whom we all pay attention to) a few months ago which I'll paraphrase; buy median priced homes in the turnkey markets and stay away from the sub-$50k houses. Median price for me is $100k - 150k.