All Forum Posts by: Patricia Steiner

@Jonathan R McLaughlin 

An investor who actually reads the docs! Jonathan, you're the real deal. The only problem with all of this from the bank's perspective is that in 99.9% of the cases, the lender (if it is a bank/credit union) remains the escrow/service agent. They're paid for those services at a discount when the mortgage is sold. With that, they do not like change and if you request one, you'll be either told no or given a form that has to be witnessed and notarized to death before submittance. So bottom line: can you transfer post-closing to an LLC if the mortgage is a Freddie/Fannie? Yes - EXCEPT in one case: when your mortgage documents specifically prohibit it as it did in this case with the contributor. Let's all remember: the contributor of this post hired an attorney. The attorney reviewed the docs and advised that the title could NOT be transferred due to specific language in the mortgage.  That language supercedes all else...it's not allowable.  Please know whether an LLC or an Umbrella Policy is your best protection; here's what you need to know:  https://www.apartments.com/ren...

It's important to remember that under the Freddie/Fannie LLC allowance, it does not protect you individually in case of default/foreclosure/lawsuit. Know what you're trying to accomplish before waging war. I do advocate the use of LLCs as well as acquiring a single Umbrella Policy to cover all of my/my clients' holdings. Hope this helps...being an investor is not for wimps! Know your business.

@Andrew C., @David M.

Here it is:  "Good news for investors from Fannie Mae...In November (quietly and with no fanfare) Fannie Mae announced that they now allow the post-closing transfer of title to an LLC."

And, go to the Freddie Mac site for all the clarifications:  https://www.google.com/search?...

It's important to really KNOW the business - it changes in some way every day.  But also remember that you hired an attorney who has told you no...your loan documents may prohibit it and if so, it's prohibited.

Hope this helps...

Your plan is solid - send the letter now; it is the right thing to do and demonstrates respect.  But I disagree with you on continuing to cheat yourself from the rent you deserve.  I recommend doing the market research yourself (you should never trust anyone else's numbers) and make sure that you're right on market rent.  Also look at day on market to rent.  Then raise the rent to market price.  If the tenant leaves, she will have to rent elsewhere for the amount of your increase or more.  I would simply right the investment because you'll always be below the rent price - earning less than you deserve - unless you just do it and do it guilt-free.  And, you accomplish that by giving the tenant plenty of notice.  Hope this helps...

Bottom line:  the market dictates both the rental demand and the price.  If the numbers don't work, you will not be successful in attempting to overcharge in a market where tenants have options.  My recommendations are:

Look in a neighboring market.

Drop your price point and look for lower priced properties in B markets - as long as the rental demand is solid.

And, the here's the best for last:  Buy an opportunity, not a method or property type.  Maybe flipping is the better game right now; maybe converting a non-traditional property into a rental is the best route.  Again, go for an opportunity.  I think you're cheating yourself to do otherwise.  

I had a client who attempted to force through a change from personal name to LLC with a lender - and the lender said no a couple of times before advising her that they would call the loan if she violated the covenant. A title company will not file the Quit Claim without contacting the lender when a conventional mortgage exists on the property. Here's what I recommend: live up to the terms of the contract and purchase an Umbrella Policy which is an inexpensive and must-have for Landlords. And, then next time you acquire a property, use your LLC since Freddie and Fannie now allow LLCs to be used in their transactions. The Trust recording that was referenced isn't a good asset protection vehicle for investors as it can be restrictive and costly to setup. Stay the course. Get an Umbrella Insurance Policy. You're doing great with two properties in your empire. Rock on...

With a reverse mortgage, the full amount owing is required to be paid off in full.  IN FULL.  The reason it's probably been on and off the market is that the balance owing isn't what it is currently worth.  A reverse mortgage changes the whole scenario - and there's no exception.  To make this even more "entertaining," know this:  "A con of a reverse mortgage is that the loan balance increases over time as interest on the loan and fees accumulate."

There's a reason properties don't sell...and whenever you see "reverse mortgage foreclosure," BOLT.

Time to go hunting again...

You need a real estate attorney.  It's important to know that "deed restrictions “run with the land.” This means that they’re connected to the land itself – not the structure built on it. In theory, this means that everyone who buys the home must obey any restrictions unless there’s a specific expiration date in place."  

Deed restrictions can be a struggle to change and "very rarely get updated to meet modern laws."  Since it doesn't reflect current zoning, you may be able to go before a historical committee/city council governing body to have it removed - and if not, to court where a judge can rule on the intent and usefulness of the restriction.  

I live in historical neighborhood and the deed restrictions here are forever things; talk to the neighbors and see if they also have deed restrictions on their like-properties.  Then consult a real estate attorney...this path will save you a lot of time and money - and they know dirt, the know the government officials who work in dirt, and they know the process of deed modification.

Best...fingers crossed for you.

Unless you're willing to do the research and learn the markets under consideration, don't move forward.  The only person you should EVER trust to analyze a deal for you is - YOU.  For me as an investor and broker, the market is a huge driver. Choose right and be rewarded for it; be wrong and it's an expensive problem to have.  You're starting an out-of-state business...you need to find out if it's the right "out-of-state" place to be.  Do the homework...

I agree with everything the contributor before me listed and would like to add that what also matters is the demand and rental price that such a property would command in a construction market.  If it's a community under construction with a ways to go, most will require a minimum ownership period before the property can be rented and there is not a lot of people who enjoy living in a construction zone.  Do the homework and make sure it's worth doing.  It wouldn't be the path of interest for me but I do know someone who bought the last two remaining properties in a community and he's happy with his investment.  Best...

You're running a business...raising the price is a business event.  And, in some states, it is required to be written with a minimum of 30 days notice.  Simply send a letter (there are sample ones online) to advise that "effective (date), the rent will be $X and payable by the 1st day of each month; please remit your rent payment (via zelle/to) on or before the due date. The increase is necessitated by increased costs and does remain within current market rent."  (Something like that...be sure not to apologize for the increase; again, it's business not personal).  Hope this helps...