All Forum Posts by: Max Gradowitz

Of course the federal government can seize your property.  The question is WILL they seize your duplex in some rural area of California or Colorado because your tenants are growing a few plants in their closet?  It shouldn't be keeping most small scale landlords awake at night.

But to your point, with politics the way they are, I would be concerned of asset forfeiture if I owned large scale commercial property leased for the purpose of manufacturing, cultivation, etc.  It's tough to claim ignorance when you lease the land for that specific purpose. 

If you buy a lien that is supposedly secured by a note, and you can't find that note, how are you going to prove to a judge that you are the beneficiary of the note?  When the judge asks for the note, what are you going to tell him or her?  "I don't have it? Just trust me!"?

I don't think you legally have to have the original note to call a note due or foreclose, in SOME states.  But it causes a lot of delay and legal costs you probably don't want to incur.  I think its possible to prove it somehow, but it would surely be an expensive legal headache for you.  As you can imagine, if you have no original or copy, you will have a really hard time demonstrating it.

Partnerships can be tricky.  Sometimes people "partner" up with another person without a very detailed partnership agreement, or without one entirely.  Huge mistake.  Maybe one puts up more capital than the other in exchange for the other partner actively pursuing deals.  But then they later start disputing whether this is fair to the capital partner if the active partner starts slacking, or whether they should both equally contribute to losses if one contributed more capital than the other, etc.

I always recommend doing everything yourself.  If you partner up with a friend or family member and the partnership loses a bunch of money because of something you accidentally did, you can easily burn bridges with great people in your life.  If you partner up with a stranger, how well do you know and trust them?

If you partner up with someone, or multiple people, just make sure you have a good attorney draft up a partnership agreement that specifically fits your needs.  This is key.

From what I understand, the CBRE (used to be called the DRE) keeps records of all licenses carried by all persons.  Persons carry these licenses, not business entities.  If you do something that warrants taking your license, they want to be able to take YOUR license, not a business entity's license.  That way you don't just open up a new entity each time CBRE shuts you down for unethical practice.  Even large brokerages have to have individual persons designated as the practicing brokers.

This is really important if you think about it. If YOU were screwed over by an unscrupulous Realtor, you'd want to be able to easily identify the person (not some random LLC!) so you could notify CBRE and have that PERSON (not some LLC) have their license at stake or otherwise sanctioned, right?

So... to answer your question about anonymity with CBRE: no.  Or as they say on the east coast "FUGET ABOUT IT"!

To answer your original question: there is no way to hide who or what owns real property. It's public information. To hide your personal name, you need to transfer whatever property you own to the name of another entity that does not have your name on it. You can use an LLC, you can put it in the name of a trust, etc.

As far as lenders allowing the name change, this is something discussed a lot on here.  Google "due on sale clause" on BP and you can read up on debates on this.  It is not really about whether the lender will allow you to transfer ownership or not, it's about whether the lender will enforce a due on sale clause if you transfer ownership of that property to some entity and keep making the payments as usual.

Here is my opinion on it: Yes, loans have a clause in them that says you can't sell the property without paying the loan off first. That makes perfect sense, they want their loan paid when you sell it. But it also technically prohibits transfer of ownership, even if you transfer it from your name to your LLC. The reason is that they don't know your LLC, they haven't prequalified your LLC for that loan, etc. So many lawyers will say that you technically should not do this because you are breaching that clause. However, in the real world, my clients do this all the time with their properties. Can the lender call the loan due? Yes. Do they ever do that? No. I've heard of it in stories, but even in those cases I've heard the lender allowed them to transfer ownership back to their personal name, no harm no foul. 99% of the time they never realize a non-sale change in ownership and never check, or perhaps they just never care because the payments are still coming on time every month. I honestly wouldn't worry too much about it. BUT I'm not your lawyer and this isn't advice.

You'll want a RE attorney for this.  Depending on your how your state handles property laws, my guess is that you will likely need two separate, and differently structured, purchase agreements.  One will be for the purchase of the land, which will look similar to a standard residential purchase agreement describing the property by APN.

The other will be a mobile home specific purchase agreement.  Mobile homes that are not permanently affixed to the land and are not legally changed to real property (like you described) are not considered "real estate" in many (maybe all?) states, so the purchase agreements for them are very specific (identifying serial numbers, make/model info, etc.) and look different than standard purchase agreements.

This is simple. A title company can transfer property using a quitclaim deed. You just transfer ownership from your own name to the name of an LLC. Easy. But there will be some minimal costs and fees from the escrow company and the county to do so.

I'll bite, a little. People ask me this in California all the time.  We recently went the way of Colorado with the recreational legalization, so many landlords have these types of questions.

As a landlord and an adviser to a lot of landlords here in CA, I don't see any realistic issues with whether your tenant uses cannabis or grows a small amount within the bounds of state law.  Even if the federal government were to crack down on cannabis, which they have the legal right to do (Google federal preemption), they realistically will likely never take the time to do anything with small time users and growers.  Otherwise, half the population of California and Colorado (and probably every single tenant I have!) would be at threat of being arrested all the time.  If everything is within the state laws, what I really see in the real world is people buying and using cannabis often, and even growing in small quantities within the local laws, and nobody cares, state or federal.

Now, I will say, it is important to protect yourself by how your attorney words your lease agreements.  You should ask your attorney (I would personally try to find someone that markets themselves as a marijuana business attorney actually) to draft a rental agreement that includes as grounds for eviction any growing, using, selling, possessing or anything else pertaining to cannabis (which a good local RE attorney will know the specific laws of).  Just be aware that my best guess is that over 50% of my (best) tenants use cannabis, its extremely innocuous and common here, so realistically no landlord I work with enforces this and evicts tenants based on this, unless it is very obviously against state law (large scale unlicensed growing for example).  If I enforced such a policy, I'd have vacancies galore.

If your commercial tenant is a large time grower on a large commercial scale, my thoughts would be different, particularly when it comes to federal preemption.  This is where it gets very complex and I shy away much more from saying it's not a big deal.

This is not legal advice for anyone, don't take it as such.  This is just informal talk about cannabis and real estate.

C class properties have made the most cash flow money for me and my clients.  People should not be afraid of these. I get so many people looking for A and B neighborhoods in SoCal until they realize that there is no cash flow in areas where over 95% of the homes are overpriced and owner-occupied.  Owner-occupants will pay way more for their dream home in the A class area in their city than they would for a C class rental property, and this over-inflation in nicer mostly owner-occupied areas causes these areas to be way too expensive.

As far as screening, this is where property management pays for itself and FAR MORE.  I have a busy day job.  I'm not going to do an extensive prior rental history check, background check, and credit check for 30 applicants.  I'll gladly pay the minuscule $100 or so my management company charges (seriously, that's like $10 an hour, that's NOTHING!) as a "tenant screening fee" to screen for and find the single best tenant in the stack of applications.  Meanwhile, I sit back and collect checks every month.  The key is to have a good management company to do the three major things I said: check their prior rental history by contacting their prior landlords, and do the standard background criminal check and credit checks that most management companies do.  Not all of them go as far as to call ALL prior landlords, the one I do does.

It comes down to how they originally took title.  In many (probably most or all) states, married couples tend to choose to take title as "joint tenants" or by "entirety", which means that when one spouse dies the other now has a claim of full ownership of that property.  There may be personal reasons why married couples will choose to take title in some other form like "tenants in common", in which case when one spouse dies, that deceased spouse's share is passed on through their will, trust, or probate.

You need to do some research on how they originally took ownership.  If they took in only their own names and as joint tenants or by entirety, and if one of them died, that surviving spouse (Grandma) is the full legal owner of the property.  Depending on how things are done in your state, she may have to get a lawyer to deed transfer ownership by deed to her name alone prior to any sale, but this is easy to do.