All Forum Posts by: Ryan Seib

Most likely that is one of their options. The contract does not have to state how it will be enforced to be enforceable. And courts recognize that not every contract is feasibly enforceable simply as liquidated damages. That is also the reason we have injunctions/restraining orders.

That said very few courts are going kick a family out of their personal residence on a breach of contract case unless the case for the buyers is very compelling. I would of course contact an attorney who is familiar with real estate contract litigation, to see what their evaluation of the scenario and your local courts are. Then have them contact the buyers real estate agent and/or attorney and give them a small part of the earnest money to drop the claim. That usually works just fine. Even if they threaten specific performance they really just want more money. 

An eviction is a least good outcome scenario. I would first try cash for keys. Assuming the relationship cannot be restored (which is just an assumption), you would, as said above, write him a letter with a copy of the lease attached. Point out in the letter where the lease says he has to pay on time or he is in violation and will be evicted. Then highlight that portion of the lease. Say if you do not receive the back rent and the new months rent by the 1st, you will file an eviction. Or, give him the opportunity to leave by x date, or pay by x and leave by y, etc. Also attach the 5-day notice to the letter which is required 5 days before you can file an eviction. Properly serve this or post a copy of these documents at his place or give them to him (so you can prove later he got the 5 day notice). Then if you hear nothing or he does not follow the instructions, then file the eviction. An eviction can be quick. But it can be messy and complicated. I have seen some professional tenants get away with not paying rent for 3-4 months, living in the place and damaging it, all while the eviction court spins its wheels. Fortunately most tenants do not take it that far. But once you get one in court they are backed into a corner and will probably fight you as hard as they can. Anyway best wishes with that!

Mostly a tax question. The partnership just needs to be set up so all the cash flow attributable to your share in the entity is gobbled up by some payment obligation to him, in a way that equalizes tax consequences. Just play with the amortization and interest rates. He may need a personal CPA and/or financial advisor to model it for him. Then you just have a lawyer draw it up. 

Most important is usually the no-shop provision so you can lock the deal in while you look at it. 

Does owning hotels mean you have to have a "sense" for the design of hotels, for presentation, aesthetics, etc? That would be a barrier for me. I like Bach and Handel and all but I am not sure how well I can get into the mindset of the hotelier, picking out expensive tile and chandeliers, etc.

Thanks for the post!

The rates should be published in most states according to the department of insurance. Title insurance is regulated by the same governmental agency that regulates life insurance, disability insurance, etc. So they have filed rates, usually within a min-max range. The rate is usually a schedule based on purchase price. So it looks like x for the first $x, + x per dollar for the next $x, etc until you get to your property value. In Wisconsin the policy charge on a $2M would be something like $2300 I believe. That is just the policy rate though. It does not include search fees, endorsements if needed, closing costs, deed preparation and recording, etc. But yes as others have noted a call to a title company or two should clear up your total estimated charges for a specific deal ahead of time. Best wishes!

That sounds pretty high to me to set up some LLCs and sign an S-election. I would make sure to shop that around. That said, the main factor with hiring professionals in my opinion is personal trust and integrity of the professional. Would you trust that person in your "inner circle" giving you advice on not just business but all areas of life? Then it may be worth it to do whatever it takes to get that person on your team. So keep price in mind but sometimes their services might just be totally worth it or necessary.

Of course it would take a lot to convince me to invest $15k to set up some bureaucratic out of state LLC structure just to avoid the tax man. The benefit to warding off litigation cannot possibly be all that much higher than a bigger insurance policy. So I would at least expect the proponent to show me tax savings projections based on my unique tax situation that calculated I would make the $15k back! Perhaps if I was a public figure and wanted the anonymity I would pay a lot to get it. Anyways, I hope that helps!

Agreed a law firm with attorneys licensed in multiple states is fine. Or just an attorney in you home state. Attorneys can always find co counsel in a different state if needed someday. 

The written agreement is king. If they want to change it they have to pay a fair sum to do so.

I would have a real estate lawyer review the title company's proposed policy binder. See what exceptions and coverage they are offering. If they are offering proper coverage, then it is on them so you are good to go!