All Forum Posts by: Mike Goikhberg

by outside protection I just meant that the properties one holds inside an LLC are not accessible to creditors in a suit being brought against the person in their personal name. not that I would be protected from lawsuits in general just because I have an LLC. That's interesting about the no capital gains thing though, I hadn't heard of that. Selling to your own LLC sounds clever as well, hadn't thought of that.

I do plan on getting a decent insurance policy for sure. However several lawyers (from anderson law group) and also one CPA from the BP forums have pretty conclusively stated that LLC's do in fact protect your properties quite a bit - Both inside protection (someone banging their head from a fall inside your property), and outside protection (you OR your dependent hit someone with a car and get sued). The CPA even talked about how he used to think it's all superfluous until he ran into a situation where a client's son created a liability that ended up costing said client over 3 million $ of real estate because it was in his name. Many similar stories were shared by the lawyers from Anderson. I agree I shouldn't be dwelling so much on these details, I probably won't be making an LLC yet, just figured I'd see what people on this forum had to say about the situation. Thanks!

Well we want to build a portfolio of properties that we will equally share the cash flow profits from. It's just the first property we want to acquire with as little $ down as possible, which we can't do unless I occupy it for a year (so it has to be in my name) You're right about the low equity and at this point it doesn't really matter from an asset protection standpoint since there's not much to protect. But let's say in the coming 2-3 years we end up acquiring another 20 properties in the LLC we co-own, I would want this first one to be part of that LLC as well. Otherwise my partner that I'm working with won't be legally entitled to its profits. This is a partner that I am planning to work with long term, not just a temporary money partner. The idea is to have our real estate business activities be 50/50 all the way through, both active and passive. Maybe this isn't commonly done? I'm not sure. Also, if me or him will be guaranteeing all the loans for the LLC, doesn't that defeat the purpose of the property being in the LLC from an asset protection standpoint? If the loan is in mine or his name, even though the property will be in the name of the LLC, and someone sues the LLC, won't either one of us then still be liable for the damages?

Here's a bit of a complicated question - My partner and I are getting into the real estate business together. We plan to create a C-Corp of which we will both be shareholders for all of our wholesaling operations and income. We also plan on opening LLC's for rentals, which will be managed by the C-Corp. However, FIRST I want to house hack, in my own name, with a 3.5% down FHA loan. I am thinking of acquiring this property in a land trust, of which I will be the beneficiary, and later reassigning beneficial interest from myself to an LLC my partner and I will create, so that we can then have this rental as part of OUR portfolio. As I understand it, the reassignment of beneficial interest is a private process, the bank will not be alerted about this, and they can't invoke the due on sale clause since it's in a trust. However, in this case, since the loan will be in my name, will this cause any issues? In general, is this a viable strategy when you want properties to be in an LLC but your LLC does not yet have enough of a track record to be granted loans to buy properties?

All very helpful responses, thanks a bunch for your input. As for the separate utilities, I have heard of a system called RUBS - Ratio utility billing systems. I think these are more so used on larger scale multi families, but perhaps could come into play here? Anyone with experience using RUBS, especially on residential size multis?

For the seasoned rental investors out there, especially in the baltimore area - I'm thinking of picking up a fourplex that's fully occupied. However, I really want to get is under an owner occupied FHA loan with 3.5% down. The house has an extra room that's separate from the other units and is unused. Do you think it's doable for me to get an FHA loan stating that i'll be staying in that room, while I try to get one of the tenants out (they're on month to month leases)? My other question is has anyone ever even tried to "get a tenant out" for the sake of you occupying the property? It seems like a total a-hole thing to do. Also, the current landlord is paying all the utilities in that property, which comes close to a grand a month. How would you guys go about telling the tenants that they're now responsible for utilities once you take ownership of the property?

Hmm yep it has no zip codes and it's a paper print out. I guess the way I was thinking of it was to target the properties that have relatively small liens on them, in expectation that the owners of these properties would be motivated to sell at a discounted enough rate that I could pay them for the property AND pay off the lien and still have a decent deal. But I sure am glad that you intervened here because it sounds like I would've wasted a Bunch of direct mail $ lol

Ned Carey maybe I misunderstood what they told me at the housing office. I paid some worker there $10 and got a list of all the properties in the city with tax liens, and it says how large the lien is as well. And if the property is vacant or not. I THINK the lady said these are properties that will be going up for sale in the coming year. And thanks to everyone for the tips, lots of help.

Yep wholesaling is precisely what I intend to do. I like your concise summary of action, it's definitely helpful, and I think I'll apply the tax assessor mailing address idea to all the vacant properties on my list.  beenverified.com is certainly something I will be checking out. I tried using peoplefinders.com (also somewhere around 25/month) but they were crap. My partner called every # I pulled off of there that was supposedly associated with the current owners and not a single one was a hit. He left messages for a few and no one called back, but everyone else either said wrong # or the # didn't even work. Thanks a bunch for your input!

Here's my question to anyone who may have gone through this process - I got a list of all the properties with tax liens on them in Baltimore city, that will be going up for tax sale soon in 2017. I also got a list of all active code violation properties from the housing department. Both lists designate if the addresses are vacant or not. So, should I just mail all the NON vacant ones, since the vacant properties often may not have address forwarding set up? Has anyone had experience with this as far as how much return mail you get when mailing vacant addresses? I want to pull 200 addresses in zip codes relevant to where I'm looking from each list, I just want to decide whether to target vacant properties or not. I know there is a service called spyreal.com which can really help find the right addresses to mail for the vacant properties but they charge like $200 to analyze 30 addresses...and that's obviously way too much considering I'm trying to amass 400 addresses. Any and all input appreciated!