All Forum Posts by: Jeff Rabinowitz

This is a very unusual thread. It contains the wisdom of @Tom A. explaining that there is both opportunity and peril in Detroit (probably not unlike most other urban centers) and Scott K. posting comments without being totally negative. I complement you @Rosalina Brenda Berk you seem to have a rare talent for starting threads. You should do so more often.

There are a lot of identity theft protection plans available. I have not been a victim but I have received a prompt notice every time my wife or I have opened a credit file. I would hope fast knowledge of the event would limit the damage.

Hello Gina. Welcome to BP. This is going to depend on how much of a mess it is. I had a company lift and repair a badly cracked garage floor by pumping hydraulic concrete under it. It was inexpensive and worked very well. They didn't have to haul any of the broken pieces away. I used the same technique on a sunken walkway and porch step also with good results.

Hello Brent. Welcome to BP. That seems like a large jump in premium price to me. Rental insurance doesn't cover nearly as much as homeowner's insurance (there is no coverage for the contents, personal property) so I would expect the policies to be less expensive. All of my rental policies are less expensive than the policy on my personal residence. Check to see if there are discounts for having smoke detectors, deadbolts, etc. It is easy to get quotes from other agents--just send them the declaration page of the policy. If you find that your policy is competitive you may want to explore raising the deductible.

Overpaying for a property is not the worst thing that can happen to you. When I began building my rental inventory I overpaid for every house I bought. The market was competitive and I wanted to buy houses (not just make offers on them.) Everyone of them was cash flow positive and if i had waited 6 months or so I might have had to pay the price I bought at anyway. Unfortunately, this was a few years before the big crash. I still hold some of those properties and even though they are definitely not worth what I paid before the crash they are still cash flow neutral to slightly positive. It isn't that hard to hold them.

This is a long way around to telling you that time can heal a lot of mistakes in real estate. If your house is cash flow neutral to positive when it is rented it should not be too difficult to hold. If the market is appreciating even a little it may not be long before you can afford to sell your mistake. Then again, if rents rise along with prices you may not wish to.

This doesn't seem workable at all. How does he suggest you approach the investors? Perhaps you should ask your investors for 30% more than you plan to offer for the property to give you room to negotiate (assuming 30% more might still make sense.)

What if you are asking for a seller carryback? Should you inform your investors that they may be getting an immediate return of 20-30% of their funds if the seller agrees to carry some financing and you would hope they wouldn't expect a fee for having the funds on deposit for a month or so?

What if you can't come to terms but your investors have put funds on hold for you? How long do you think it will be before they no longer open your e-mail?

The lender generally has more control of the terms and would provide the documents. He who has the gold makes the rules. However, in this case it seems that your friend is helping you out, that you need them more than they need you. Don't make them work too hard. Get the templates yourself, discuss the details with them and then fill out the documents together. 

@Jessica Sorensen, you don't need a lawyer to draw up a loan agreement and as long as the funds are paid back and everyone is happy there may not be any issues. If there are problems with the repayment an improperly drafted agreement will be up to interpretation by a judge (if courts are necessary.) Results are not always easily predictable when left up to judges.

However, your lender will not be very well protected with just a loan document. In order to protect them you should file a mortgage against the property. That way, if there is ever an issue your friend would be able to foreclose on the property to recover their money. If you decide to do this (and you should) you will need a mortgage (this is filed with the County and gives the lender the right to foreclose) and a note (this spells out the interest rate, the term of the loan, and if payments are required it specifies how much they are and when they are due.) You could probably find templates for these. You may not need a lawyer to draw these up but it may be prudent that you speak to one so you are familiar with the issues involved. Since you are in California it is best to seek local opinion.

@Account Closed, Eric Tomei and Mike Simmons are local investors who had experience with a facility like this. I see Mike on the BP forums fairly frequently. I don't recall seeing Eric here. If you need phone numbers for either send me an e-mail outside of BP or give me a call.

You may borrow up to the lesser of 50% of the balance of your Solo 401k (self directed 401k) or $50K. You must pay it back within 5 years with level payments made at least quarterly. If you have an outstanding balance at the time the loan is made the maximum you may borrow must be reduced by the maximum balance of the outstanding loan during the year before the loan was made. I am somewhat familiar with the rules but am not an expert so am tagging @Dmitriy Fomichenko to see if he will verify or correct my response.