All Forum Posts by: Mitch Kronowit

Matt, your passive losses are unlimited if either you or your wife can qualify as a real estate professional. That doesn't necessarily mean one of you have to have a real estate license to qualify. Talk to a CPA. Being a teacher, you may be able to log the required hours during the summer.

R, you'll find most investors simply deed their investment properties over to their LLC regardless of how the lender feels about it. Conventional wisdom dictates you do it quietly, i.e., not even notify the bank about the transfer. They have plenty of other things to worry about at the moment and 99.999% of the cases will probably slip under their radar.

I don't see how leasing the property to your LLC will offer you any protection personally. You're still the owner and subject to liability. I'm sure automobile manufacturers have somehow broke the code and are able to lease their vehicles without being liable for any boneheaded stunts the driver pulls, but I'm not so sure that kind of "firewall" can be constructed between a piece of real estate and the owner on title.

Interesting thought, however.

I purchased a condo back in 1992 or so and lived in it for about 5 years. When I moved away, I turned it into a rental and it's been a great performer. Not only has it been self-supporting (positive cash flow), it's worth double what I paid, even after the recent crash. At one point, it was worth triple its purchase price. We plan to have it completely paid off in less than 10 years.

We just recently bought another condo nearby in our home town. It's in a similar type of neighborhood, i.e, solid middle-class, blue to white collar area.

I have one friend who only invests in condos for rentals and has had good luck with them. They're simple to maintain (no yard) and there's plenty of potential renters.

The only reason I can see people having such bad luck with condos is either they have a poor HOA/property manager or they're buying condos in crappy low-class areas that only attract the least desirable type of renter.

I believe this is 99.99% of the case. The banks are having enough trouble finding their @sses with both hands right now, much less bothering with title transfers involving current mortgages.

I posted a short anecdote recently about one investor I know who got called by the lender regarding a property he took over "subject to". The only reason it came to the bank's attention was because of a mix-up in the monthly payment amount. Long story, short, they didn't really care about the new owner on title, they just wanted the few hundred dollars they were owed. After it all got cleared up, he never heard from them again.

No. You would still need the beneficiary of the trust to be a limited-liabiliity entity such as an LLC or Corporation.

If FMV is $180k, why would the seller let you have them for $154k???

How high should your offer be? Not a penny higher than what they're worth to YOU. Is your plan to hold them? Here in SoCal, $2,900 rent for $200k in property is a killer deal.

Have you sized up your competition? Unless you're the only wholesaler in your area, you're going to need a way to differentiate yourself and gain market share. What can you do that the competition doesn't do? What can you do better? Cheaper? Faster?

Does it sound like I'm making general statements that can apply to wholesaling either houses or toilet paper?

BINGO! :-)

Our leases are several pages long. And they're somewhat state specific because of certain statutes, such as CO detector requirements, lead paint disclosures, maximum time security deposit can be held, etc.

I would try Googling residential real estate leases with your state in the search and see what you can borrow off the web.

I've owned a condo for 2 decades and it's been a rental for the last 15 years or so. It's not without it's difficulties, but otherwise it's been a great investment. They're relatively easy to maintain (no yard), the outside is taken care of by the association, and the HOA helps keep your tenants from misbehaving.

We just purchased another condo not too far from our primary residence. Of course, both condos are in solid middle-class neighborhoods that appeal to white-collar tenants. Most of the condos I've seen in lower-income areas resemble inner-city projects and, therefore, to be avoided.

The old conventional, but flawed, wisdom is that real estate values move opposite interest rates. For example, earlier last decade, interest rates were low and prices went through the roof. However, today, even lower rates have failed to pull real estate values out of the gutter.

Interest rates have some effect or influence, but there are a number of other factors (unemployment, economic outlook, population growth, household creation/consolidation, consumer confidence, tax codes, etc.) that are more powerful in determining housing prices.