All Forum Posts by: Mark Bookhagen

Yikes... lots going on here. If you have siblings, I wouldn't do this unless you get the property into your name. Why not just buy it from your parents and they can use the money for whatever they want? 
- The word "profit" needs to be defined, as it can mean many different things depending on your point of view in this case.

- Does the down-payment on #2 equate to the equity he's giving you? How can you be sure?

You'll need to record the mortgage. Also, I would get a deed in lieu of foreclosure that you can file if necessary. I think you'll need to go through escrow so the buyer has assurances of a clean title. I would call the title company for most of these questions to find out what applies in CA. Interest rate can be anywhere between 4.5%-7% depending on their credit. I would ask for a personal balance sheet as well to make sure they can afford the payments.

@Neal Li - Yes mine is a regular resi Fire Policy bundled with liability. Also, the difference in premium between $500k and $1MM liability will surprise you (it isn't a lot), which is why I opt for the higher limit.

@Jason Bott - I agree 100%; I'm just overly cautious since it doesn't hurt to have the members/managers listed additionally even though it isn't needed. 

Everything is negotiable. 

Insurance would be separate (no discount). You can definitely negotiate with the same vendor as a team, but have separate service contracts for trash/plowing/landscaping/cleaning. The savings of partnering won't make or break the venture. Just imagine Thanksgiving when your brother didn't hold up on his end of the bargain and your wife is upset about it... As his brother, you'll forgive much easier than she would. Best of luck!

I would get a lawyer involved ASAP. Seems pretty obvious they are stealing from you. And I would RUN, NOT WALK to a new property management company. Do your due diligence on the new company. Make sure the new PM knows how to file the appropriate paperwork to get the rents from SEC 8.

Get as many "lines in the water" as you can. MLS and wholesalers - good start. You may want to do some direct mailing to non-owner occupied duplex owners - these are usually the best deals because they cut out the middle man.

If I were you, I'd keep things separate. If your wife has reservations about the legal partnership, she must have her reasons. Money isn't worth straining family relationships. I don't see much in the way of savings by combining things. Prop management is a percentage of rent - so no savings there. Cleaning - you can still negotiate a package deal with the cleaner (if we give the contract for cleaning both buildings, we need a discount). Supplies - I don't see any savings here either.

Your insurance agent is on the right track. The primary insured should be the property owner (LLC) and you (Neal) would be the "additional insured." At least that's how I have mine set up.

You can, but to what end? There doesn't seem to be a point in doing so if you have/keep the property in your personal name.