All Forum Posts by: Jeff Rabinowitz

I strongly disagree that the Government does not have a financial interest in this.  The regulators need to prove their value to exist and when they do they will be rewarded with larger budgets for more employees.  The bounties will lead to more monitoring of more activities of more citizens. 

This will also have a chilling effect on business as more people choose not to do some transactions because they may be construed as illegal by an agency.  Not because there is illegal intent but because it is not worth being in the space anymore.  The fact that we are becoming a nation who spys on our citizens and coerces and rewards citizens to inform on each other will hasten this.

I have already experienced a form of this.  I made a few cash deposits in my bank a few months ago.  (I needed to mobilize my emergency fund to complete a deal).  I made several deposits at different branches of the bank over a period of 3 weeks.  (I know the managers at both branches and both are about equidistant from my home).  None of the deposits were near the reportable amount but in aggregate they were.  There was nothing illegal about where the funds came from or what I was doing with them.  (They were actually drawn out of these banks over a couple years).  The internal compliance department of the bank flagged my account to be closed.  Both managers spoke on my behalf but I did not know whether the accounts would remain open until hours before their self imposed deadline.  The bank was reacting beyond what the government required so as not to risk government inquiries. 

I believe this type of preemptive activity by banks, title agents, loan officers, etc. will become more pervasive and will make it much more difficult to do any type of transaction that has an unusual component.  This will in turn kill a lot of creative deals simply because the agents do not understand them.  This country will suffer economically as more businesses close up rather than risk violating a term of legislation which those who passed it into law did not understand or, in many cases, even read.

@James Wise, I would contend the realtard wasted her own time.  If she doesn't have a way to screen (screen out) her clients that is her own fault.  Yes, the guy is a jerk but it should have been fairly easy to determine that without wasting much time.

Late Summer/Autumn is a great time to plant.  The roots have plenty of time to get started before the ground freezes. 
My gardener often seeds just before the snow falls to fill in bare spots.  They sprout in the Spring once the ground thaws.

He is asking for the names of some lenders.  If that is his need what harm is there?  If lenders or their representatives reach out to him or request to make connections with him he may find what he was seeking.  He may find several local investors who can share their experiences with different lenders.  If he gets more requests to connect than he cares for he does not have to accept them.  Again, why is that a problem?

Go ahead and jump in.

The buyer should record a memorandum of land contract (or the equivalent in Cal.).  That becomes a public record and should be discovered during a title search.  That should prevent the seller from selling to someone else.

@Melissa Jones, there are several ways seller financing can be implemented.  Sometimes title transfers to the buyer immediately.  Like traditional financing, the seller records a mortgage which is a lien on the property.  Sometimes the title remains with the seller and it is held in escrow until the loan is retired.  This is referred to as a land contract in some States or a contract for deed in others.  There are some States (California, Texas, Louisiana...) where some of these structures are prohibited or complicated by local law and custom.  Since you live in California I am assuming the property is in California.  If that is true it is important that you speak with local investors and perhaps, a lawyer, with local expertise.  

One of the advantages of seller financing is you avoid the often slow and painful application process that traditional lenders impose.  Also, there may be much fewer fees with seller financing. The seller will probably not charge an application or underwriting fee.  The seller may not require a survey or appraisal (you may want to order those for your own protection).  If the rates and terms are competitive this may save thousands of dollars.

@Tom V., I agree that the scenario you describe might raise attention. I am not proposing anything of the kind. The rate on the existing note would be the same as the rate on the proposed note from the IRA. Two separate loans that are secured by the same collateral which is worth considerably more than the combined total of the notes.

We do not have an ownership stake in the project. We are not on title. We have made a loan to the investor secured by a mortgage on the property. We are considering making a second loan on the same project from the IRA.

My wife and I have written a personal note (made a loan) on a real estate project. This project is going to require more funding to complete. I am considering providing a second loan, from my self-directed IRA (or my wife's Solo 401K), to this project. The SD IRA loan will be in second position. Would this be considered a prohibited transaction?