All Forum Posts by: Account Closed

While I'm not an attorney, I do have to disagree with part of your reply, @Cameron Skinner.

While you don't have report non-member shareholders to the state, you do have to report managing members and managers. However, these non-member shareholders are created through the Operating Agreement and issuing share to these members. They are as official as they are the paper you issue the shareholder certificate on. Unfortunately, a non-member shareholder isn't going to offer any additional protection.

It's true that you can be a manager or member of the LLC without any ownership. However, if you are the only member of an LLC, it's my understanding that you are assumed to own 100% of the share of the company. If you're the only member/manager and own 0% of the company, then no one owns the company, therefore it simply couldn't exist. You can however, be a member/manager of a multi-member LLC and have 0% interest, though the other parties would need to have ownership that equates to 100%.

Cameron is right in recommending that you have an Operating Agreement prepared. I would recommend using a template and paying an attorney to review it.

Donald, a lot of people do a quit-claim deed title transfer into an LLC if they're held in their own name. If your properties are paid for without any financing, you can do this quite easily. However, if you are financing some of these properties, transferring them to your LLC could activate the due-on-sale clause and become quite the hassle.

Damian, if you are the sole-member of the LLC, you are classified as a "pass-through entity" by the IRS, meaning you will be taxed as if you are an individual/sole proprietor unless you elect to be taxed otherwise (e.g., as an S/C-corporation).

If you are going to be financing the property and not paying cash, it could get a bit muddy if you transfer the property to your LLC. Since an LLC is an entity outside of yourself, I would imagine this would be considered a title/lien holder change, which could trigger the due-on-sale clause.

This article on BP outlines a lot of the pros/cons of using an LLC to hold and purchase rental properties: http://www.biggerpockets.com/renewsblog/2013/08/17/rental-properties-llc/

Gert, my understanding is that a single-member LLC does not offer the amount of charging order protection against creditors as does a multi-member LLC.

This website should give you some additional insight on Florida specific concerns with single-member and multi-member LLC's: http://www.nolo.com/legal-encyclopedia/llc-protect...

Ah, geeze. Fences like that can be a real pain.

The hard fact is that if the holes he dug are really dead center on the property line, meaning they are 50% on your property and 50% on hers, and they put a fence in there, they are encroaching on your property. The same can be said if you put a fence dead center on the line. You can put up a fence on your property and she can put up a fence on her property.

The first step would obviously be to talk with her and come to some sort of resolution. If you're comfortable with her building the fence, that's fine. But that doesn't mean the new owners won't have a problem with it later (assuming you're flipping the property sometime soon). And if she agrees to let you put up the fence, the same can be said for her. She may not bother you, or she may cause a hassle.

There are generally a few things you can do if it gets too complicated:

1. Come to an agreement and file an easement

2. Get a boundary line adjustment (which will require a survey)

3. File for adverse possession/quiet title/damages

Jai, welcome to BP! 

I'd recommend you take a look around the forums, resources, and how-to guides (under the "Learn" tab at the top) as this has been discussed in great detail many times. There really is some excellent content on this site. 

The most blunt piece of advice I can give you is that once you have a framework of knowledge, just start doing it. So many people spend months and months analyzing, checking, and reading when they already know enough to start doing deals. The most valuable knowledge you will gain through experience.

Deb, it really depends on your market activity. If you find comparable properties with similar square footage, features, bedrooms/bathrooms that are renting for a price that you find acceptable as an investor, then the investment to improve your property might be worth it.

I've seen a lot of HUD homes that come on in my surrounding area at the very low end of their current market value.

I placed a bid on my first HUD home about a month ago at about 11K below asking price. The bid was denied and kept "on file as a backup". I thought the deal was dead, but the offer was actually accepted about a week later. To my benefit though, I have a feeling that multiple offers drove the price up, but some of those people may have been using financing and this particular home probably wouldn't even appraise at asking.

I guess the most ambiguous but accurate response would be: it depends!

There aren't any FAR/BAR contracts for wholesaling. A lot of people use their own contracts prepared by attorneys or they modify a template. 

I always recommend using an attorney to prepare contracts. If you'd rather customize a template, at least have an attorney review it and provide any recommendations before you start using it. 

You certainly don't NEED a DBA or LLC. However, an LLC will give you charging-order protection and some additional flexibility in other areas of your business in terms of taxes and record-keeping.

What John said holds merit though: start doing deals, generate revenue, and use some of that cash to get your assets secured. Though I personally would be willing to risk some cash up front to ensure everything was as tight as possible.