All Forum Posts by: Ryan Seib

Education series. Each presentation by a lawyer on an issue relating to Real Estate law for investors. Followed by Q & A until all questions are exhausted (within reason). Presentation topic for this particular event is:

10 Big Landlord Lawsuits

by request. Basically, we will look at some big examples of lawsuits where landlords got smacked with damages or liability and learn (hopefully) what not to do!

Slander of title?

I would just suggest there is not enough information to give you great pointers on where to start. Do you have experience with hotels? What type of experience? Who are the professionals on your 'team'? Where are the funds coming from? At a minimum be wary of venturing into the unknown of the hotel world (a declining asset in general though I suppose not 5-star markets perhaps). like anything else unfortunately, the best ways to find investments that actually make sense are to know people who you can trust who then recommend something for you--not just so they close a deal but because your particular needs are a good 'fit' for that project. Ideally, you would have some trustworthy attorneys, accountants, lender(s) and a personal wealth manager/advisor to work with. Be careful on the last one though since a lot of personal wealth managers prey upon high net worth people. I saw a former NFL player the other day who is now delivering mail for the post office.

Only a little experience with this but you have to request a discharge from the IRS directly. Not necessarily a quick process. They should reduce it to equity in a sale though, generally.

Hi Monica, can you be more specific about what the arrangement you envision would look like? I do not see why you would want to form a partnership. Too complicated for general use unless you want to have professionals on retainer to handle the details. And even then... If they want monthly cash flow why not just pay you as an independent contractor for whatever work you are doing? If you want an equity position they could sell you the propert(ies) on a seller financing contract so they still get cash flow but you manage everything and eventually (10, 20, or 30 years later) own everything outright. If everyone wants an equity position then I agree an overall partnership might be better rather than having different arrangements for each property. But in general it is best to find a way to separate debt from equity financing. Even splitting up the buckets between parties and letting everyone participate in a central property management company, or only granting income shares not capital shares, would be better. It is so much easier to be able to just make the decisions for the business without needing to check with all the partners first! Obviously there are situations in which partnerships make sense. I would not broadly condemn these legitimate business structures. But it is usually a less optimal solution. 

For those that asked what might happen to their money and tax situations now you may want to check this out and see what the IRS and the bankruptcy court ruled:

https://www.realized1031.com/blog/what-happens-if-your-qualified-intermediary-files-bankruptcy

Yes you can do that. It is not illegal to get financing just because you also have cash. Is it ethical to use that just as an 'escape hatch' if you do not like the deal. I think that is situation dependent and really is a case-by-case analysis. Though I agree on the whole it sort of seems like an unethical pattern. And that can matter legally because some concerned citizens groups and legislators like to try to crack down on what they perceive as unethical business practices to protect the public. Best wishes in buying!

If he is married to her how is she his ex-wife? Is it a community property state? Is her name on the deed anyways? Hard to tell without knowing those details. If they are married and it is community property, or she is on the deed then yes, you need her to sign. Unless you want to buy 1/2 a house!

I do not practice in that state. But you have to weigh the costs of the operation with profit expected from (I assume) selling off the units. You need to turn into a unit selling operation, and line up property management, handle sale disclosures, administer a good HOA situation for newcomers, on top of all the other stuff your business does. The legal fees can be pretty high. There would be a lot to discuss. I suggest the first person you talk to be either (a) a developer in your area who has done it--successfully, or (b) an attorney who has helped developers such as the one in (a) to do this and can walk you through the process. Best wishes with that!

@Eamonn McElroy

I am happy to surprise you! Yes I think language matters. I am not convinced that is equivalent to the conclusion that technicalities matter. Seems like we should discuss concepts over semantics.

That said I already said I appreciated the correction. It would happen eventually. 

If you hop in and want to call a stipulation an agreement, that would be fine with me.