All Forum Posts by: Steve Morris

THat is a good question.  In any case, I think as long as you treat all applicants the same (i.e. state no tours unless you pass the screen) would be a minimum.

OK< I think your right, but the "in case of loss , the existing loan could incur upon me only" confused me.

Usually on debt you're joint (both are responsible for all the debt) or severable (any one of you is responsible for all the debt).  I don't know if you can give your partner a carve-out like that since a bank wants as much recourse (i.e. people) to go after as they can.

"the appraisal comes in 30%-40% higher than the comps in the same neighborhood. Would this be a bad investment?"

On appraisals:

1) Who ordered the appraisal, the lender?  Usually, they want a MAI guy with some certs.  If it's a broker (like me) doing a BOV (broker opinion of value) a lot less trustworthy

2) You can't find a perfect comp.  Hence something may sell for less, but a MAI guy will add in for deferred maintenance or being in a worse neighborhood than the subject property if its in good shape in a better location.

3) In spite of an appraisal, you should do your own income analysis to see if it meets your goals for investment returns.

Well, think you have the right idea since I've had syndications (i.e. larger deals with limited life span like 5-7 years) do this for the upfront cash flows.

For smaller guys, between depreciation and mort int, they usually have enough tax shelter to cover income from the get go until 5 years down the road, so cost seg / accelerate depreciation doesn't get them that much more beyond a carry-forward cover on income.

Out of curiosity, why your management company.  Usually, they're paid upstream from the debt, but they don't care most of the time.

I guess it is nice if they do this for you UNLESS his brother-in-law is the mort broker :)

However, at <3% that's probably as low as we're going to see rates so it's good for that.

On cash-outs, if you use the money to fix a roof (for example) and it costs $100K, you've increased bldg value $100K so no problem.

If it's for a Porsche, I think I'd fund it off operating profits.

I'd be curious on your end product, however, as a broker to generate leads in order of priority and quality oif contact:

1) F2F

2) In person spontaneous phone call

3) Text messages IF THEY KNOW ME

4) VMX (voice mails)

5) eMails and text messages if they don't know me

I understand it's a raw numbers game, but the lower the list usually worse response.  Unless I have a plan to call and follow-up and the VMX, text or eMail is a set-up for a call.

Well, if your partners credit has improved, you can come up with a new operating agreement and include him. If its the same LLC, I'd check with the bank lending officer first, but usually not a problem since that means more pockets for the bank to go after if you default.

In general, the partners in a LLC are joint and servable liable (i.e. each partner is individually responsible for part or all of the debt) unless you had some express language, but a lawyer needs to answer that and how your operating agreement is written.

I guess a bigger question is why let him share in profits, but not potential losses?

"I just purchased a property and want to be prepared for section 8 if we have interested tenants. Can anyone tell me the process as a landlord and what I need to do to be prepared"

I can only speak to Oregon, but a Sec 8 voucher is just a check from the housing authority.  However, what this means is that the case worker needs to OK the total rent with the tenant first.  Unless it's a 100% voucher, you'll need to get the co-pay from the tenant.

The case-worker may also make them move if something happens like they're in a 3 bed and all the kids move out.

In OR, you cannot discriminate based on source of income (Sec 8 voucher), so you really can't say no because of this.  However, they are subject to clearing your normal (i.e. treat all applicants the same) screening.  I don't know Cali law, but in OR, the housing authorities won't cover damage > the refundable sec deposit.

I usually don't have issues with Sec *, but they do need to clear screening and you need to enforce all the terms of the lease.

Seems weird that he can get a better loan personally than as a LLC. Unless he personally guaranteed the loan and it had recourse.

In the future, if you want to do this, go to your lender before. I've done it in OR and it's usually NOT a problem as long as the original borrower is part of the LLC.

"I am thinking of creating an app that will charge significantly less (40% - 50% less) than the two sites above, with a potentially more detailed survey."

So for $250-$300 you're willing to go in and do an assessment and run the risk of defending them if an IRS audit?

I'd think long and hard about it.