All Forum Posts by: Leonard L.

Dimitry - something no one else has addressed here is difficulties in CA with obtaining title insurance.  Yes, technically mortgages are wiped out, but there is not title insurer that will give you insurance for at least one year after the sale, at least not one I have found.  They will send you to a re-insurance company, which charges several thousand dollars and declines to issue re-insurance in about 10% of cases.  In these cases, title insurance company won't insure, at least for one year after the sale and sometimes much longer.  Buyer beware.

for newbies, this  is an extremely complex area and none of the above, for example, applies in CA even though it is a tax deed state.  It is really a state by state issue.

I should add that it also depends on state law.  In some states, such as California, acquisition financing is treated differently than subsequent financing (depending on other facts, such as whether owner occupied).   So in addition to lender requirements, you should know also how the law of your state impacts the question.

I always do a 30 yr mortgage and try to pay in 15.  Meanwhile, if you need the extra cash flow for another project, you have not contractually committed to making the higher 15 yr payments every single month. 

Welcome to BP. I am also a developer in Newport Beach, although recently I have been more of a buy and hold SFR investor. Would be happy to have coffee with you sometime. PM me if interested.

Just as "Los Angeles" means different places to different people (City?  County?  All of Southern Cal?), people have different ideas of what constitutes Inland Empire.  But the technical definition used by most journalists and academics (and the US Census Bureau) is all of the San Bernardino and Riverside counties.  Since Victorville is within SB County, it does technically lie within the Inland Empire.  I agree with OP. 

Whether one wants to own land there is a different debate.

Beware of solo 401k if you are thinking about working for someone else in future.   I think it was @Jeff Astorabove who mentioned this, and unlike others here I am not an expert on this topic, but I do have a solo 401k and have been told if I rejoin workforce I would have to roll it over. I have had several occasions where friends were considering rolling their IRA into a solo 401k because they now worked for themselves or were between jobs. But for each of those that thought they were likely to become a W-2 employee in the near future, rolling to solo 401k was a bad idea.

So lots of advantages to solo 401k, but this downside can get missed by some. 

@David Mitro

 I would say not absolutely necessary in this case.  An owner's policy insures title to owner.  A lender policy insures, basically, ability to foreclose and retain that priority.  Basically, did the title company screw up and miss a senior lien that would remain if the insured lender foreclosed.  That is what lender policy is insuring against.  

If you are close to relative (in terms of trust) then there should be no question of foreclosure priority.  If you do not repay, deal is presumably you make whole somehow (eg, voluntary transfer of title, etc).  If there is a title defect, the owners policy should in effect cover both of you in this circumstance.  On other hand, if relative says s/he wants same assurances/security a 3rd party lender would have, then a title policy would be appropriate.

I vacation a lot in Mexico, and am considering buying a condo in a great complex (the Icon) in Vallarta.  Anyone have experience to share?

First and foremost, understand his risk profile. Some of my investors want very low risk. I offer them a lower rate, depends on deal, maybe 5-8%, and low LTV on my buy and holds. Their money is safe, I return them a steady investment, and I have all the upside. Others want to share in the risk and reward. I don't do fix and flip, but there are ways of structuring where he takes little risk and gets fixed return, or where he takes full risk and rides shotgun with you on the whole deal.