All Forum Posts by: James Miller

@Jeff Piscioniere I forgot to add: you *really* (like serious as a heartattack) need to hire a real estate attorney in your jurisdiction who ONLY represents you and not the co-owners or anyone else involved so you can get unbaised advice. Too many ways you could be taken advantage of here under the facts above and way too many actual and potential conflicts of interest for one lawyer to represent everyone. 

You should make sure your state does not require you to notify the lien holder. TX does and it's likely real estate fraud if you don't. Your state may be different. 

Also, again, quit claims are bad. Use a real deed. Have a real estate lawyer in your jurisdiction draft the deed because if the deed isn't drafted just right, you'll lose your title insurance coverage (if you have any). You also want to talk to a CPA as you may be giving your co-owner a significant advantage in capital accounts. There may also be tax due if the real estate has appreciated between now the sale.

 Almost certainly will trigger your loan's due on sale clause. Also, at least in my state of TX, a "quit" claim is a bad way to transfer property. 

Also, you likley never want to own a home 50/50 without the other owner being equally liable for the loan as it gives that person no incentive to play nice regarding the real estate. Do you really think he won't ask for his 50% of the house on a breakup? And since he's not on the loan, gives him extra advantage?

I suggest you got talk to a lawyer in your jurisdiction that does both real estate and some family law, as there are a lot of issues here. If those same facts came to me in TX, I would be advising against it. So check with a lawyer in your state.

Eeek. I wouldn't touch that transaction; if California has adopted the UFTA, that not only is a transfer not-for-value, but also a transfer to an insider, and should be rescindable, whether you keep it or wholesale it. Also, because you *know* there are owed back taxes on it, a semi-decent prosecutor can probably argue conspiracy and have you charged with the same felony as the mom. 

The IRS is sometimes *very* slow to move; but once they move it's like an avalanche and you don't want to be on the receiving end of their collections arm / prosecution arm.

Check with a lawyer and CPA in your state just to be sure. But, that sounds a high-risk low-reward behaviour.

Maybe one of our kind CPAs can chime in on the applicability of 179. I thought the applicability turns on it being a trade or business under IRC 162, not whether the property is a SFH or an apartment complex. The TCJA also added certain RE categories that can now be 179'd like roof sales and HVAC equioment.

It would be a legitimate W2 regardless of whether the employee was also an owner. In my experience as a lawyer working these deals, a “self employed” person who takes a W2 seems to get better treatment than one who has no W2. Does that make sense? No.  But that is the reality I see lately. 

 If you can lowball a loopnet property you can sometimes get a good deal. In my experience, if it's been on the market for months and it's MFH, something's wrong with it; either asking price is too high or there are significant remedial repair issues needed. That doesn't mean you can't find a profitable deal; I'm just saying don't even really look at the asking price, and then come up with your own offer. 

 If you're not afraid to buy a property that needs work before renting it out, that target is completely doable. 

 I represent both owners and GCs in TX; I often only see penalty clauses as opposed to incentive clauses. Occasionally we'll see incentive clauses in cost-plus build contracts, but that's rare.

Definitely investigate insurance with a good insurance broker. But, you need to know what your primary policy won't cover, because if your primary policy won't cover it, your umbrella won't. That's where an LLC fits in, to help fill the gaps in insurance coverage.