All Forum Posts by: Matthew McNeil

Hi Shamit. Turns out that it worked to my benefit after I demanded they comply with my request. See my response to Shannon below.  Cheers!

Shannon, regarding my “threat” to stop paying Escrow to the lender that bought my loan after I completed a REFI. You asked for an update.

The Lender formally “closed” Escrow and mailed me supportive hard copy documentation. The monthly mortgage amount was recalculated to show that I would only be paying principal and interest. Furthermore, they gave me a full refund on the Escrow I paid at Closing. So, it worked out to my benefit without hassle.  Cheers!

Your advice is full of holes.  You have no idea what you're talking about as is proven by the fact that you don't understand his question. 

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;

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.

You're asking us to tell you how to profit from the deal, but you've only given us two figures; minimal purchase cost and gross rent. You're not providing enough numbers for us to offer the advice you're seeking. It doesn't sound like you've carefully looked at this. Therefore, the best advice I can offer is don't do the deal.

Ending a long day and I'll offer this totally for fun.  Buy in a high appreciating area :)

Well explained Joe. A fundamental tenant of RE investing that many people don't understand. 

Understand that California transplants bring “California equity” which is a two-edged sword that translates to both good and bad. Bend Oregon is a perfect example which was a symbol of what economists referred to as a “lifestyle destination.” If Californian’s are leaving due to political reasons then that’s a different incentive. Regardless, they are self-made exiles cashing in on their overpriced real estate which can unduly impact the recipient economy. Another example, Coeur d'Alene Idaho.  

You’ve presented a straight forward question without providing any figures. I’ll answer your question with a question; when is the potential crash coming? Smart investors here on BP aren’t asking that type of question. Rather, they move forward with securing additional assets with the intention to make sure they’re positioned properly in case a crash does come. There are different ways to do that which you can research and determine what feels best for you. Regardless of whatever strategy you employ, be sure to have reserve funds on hand which will enable you to pay the monthly expenses on the asset if you lose your tenant or if they can't pay the full rent. 

I've been investing in Meridian-Boise for the past decade.  I used an online do it yourself tax program for years, but it got to a point where I felt I was missing some things.  Someone referred me to a CPA based in Boise.  I asked them to review my taxes going back a few years and they found a major mistake I'd missed. If you want to PM me, I'd be happy to provide the contact info. I'd suggest taking advantage of the initial free 30 minute consult (which is what I did) and ask them several questions.  I was so impressed I hired them and haven't looked back. They take excellent care of me and I'm happy to pay the fee which I consider to be entirely reasonable, and its a tax deduction.