This is great and what Pace says is true - just make sure you also factor in closing costs like transfer taxes and title costs. You don’t want to get far along into negotiations and then realize you’re unable to perform due to not considering this
Love what you're saying, but you are somewhat mistaken on your LLC advice. In Kansas, and many other states, we have a strict liability statute. If you personally do something that creates a liability, your LLC can be pierced putting your personal assets in jeopardy, and it doesn't matter what you hold your property in. Now, if you have your property in an LLC, you hire a third party to work on the property and they create a liability, then yes, your personal assets are protected since all they can go after is the LLC. It is better to have a $1M umbrella liability coverage since you can throw that at them and they will go away. I have this from an asset protection attorney.
So in Kansas, a LLC really only works if you are completely hands off your investments? That doesn’t seem correct?? Because anything you do could be seen as “creating” a liability. Sounds like instead of an LLC in Kansas, you might want to setup a C corporation or another that actually protects you personally.
@@oakjim206 Not just Kansas, but ANY state that has strict liability statutes. Even if you form a C Corp, you can be held liable if YOUR judgement resulted in the claim. Also, C Corp. pay double taxes, first when the corporation earns it, then when you pay yourself from the corporation. Get over the idea you're going to get sued. If a judge thinks you made a bad decision, he'll pierce the LLC, or C Corp. I maintain my remotely managed property in an LLC, but I also keep $1M in an umbrella liability policy.
@@spldrong If you've set it up so they can't find someone to serve with papers, then they can't sue. But most states require an agent for the company to live in the state you're incorporated in. I can't comment on your case as my knowledge is general. Now this year Bigger Pockets had a couple of podcasts with asset protection attorneys. One sounded very good, but it would cost you $10K at least to set it up.
@B.J. Neyer Prime corporate services (place that Morby recommends) set me up with that... WY holding LLC owning my state LLC... so basically just 2x LLC, cost less than $1000, and I hire them to also be my agent, so that my name is on nothing. I very never been sued, so I can't tell you for sure if it works, but this is the way Anderson, Pace Morby, and several others have sworn by, so I really wanted mine setup this way. Before them I had a quote for 2k and change and 3k and some change, I felt that was too expensive, so that's why I've had the umbrella policy.... but im not gonna cancel that, will actually get a second for the operating LLC
For new home buyer or investor.. do you suggest to buy residential home as primary residence and then go to Commercial real estate investment or directly go to commercial real estate ? .. i initially thinking about buying a home..Then learned about four Plex residential multifamily with low downpayment but banks or lenders saying in this market FHA offers may not accept by sellers as competition is high.. so with conventional loan still need 25% downpayment ..So I am thinking to go directly to CRE with 25% downpayment .. but I still need to think about primary residence with decent school ratings..so suggestions please..
Great informative session Pace..kudos However I have a question - why would seller go for Seller financed? in traditional sales, at the end of the deal, seller gets the FULL amount in their hand..where as if its seller financed then he will get only the monthly installment..whats there for Seller in Seller financed? Especially if seller has equity on his / her property ?
part of the negotiation my dude! you can offer it, if it sweetens the deal and pushes them in your favor. if not, simply split it like a normal deal. However, make sure you have your terms clear and precise. and use a good title company or attorney
I am just trying to get into my first home to actually live in. I live in a very expensive area in Santa Cruz California. I’m a single mom and need help with creative financing. Does it exist in Santa Cruz?
Im a newbie in this business. Should I set up an LLC before I do a buy then buy the property under the LLCs' name. Or just transfer the deed to the LLC after the buy.
SET UP AN LLC PROPERLY FIRST! - check out PCS ( prime corporate solution ) they can set you up with an LLC - might also need to pay for the state fee. - either way, check em out. but If youre serious about business, just do it. hint: dont put your name in it ..haha good luck
In the last example, I'm trying to understand the novation agreement, I don't fully comprehend the concept, is this if the person that wants to purchase it doesn't have money or a way to get a loan? is it assuming that this person has $165,000 in cash?
A novation agreement is a creatively done fix in flip In a fix and flip:You buy at a price where with holding costs,closing costs,repair expenses you still stand to make a profit by putting it back on the market with renovations&improvements etc Novation Agreement: Instead of purchasing the property from the seller at a discount to make renovations and then put on the market (this is where it differs) The seller keeps the property in their name/possession.You do your renovations without actually purchasing the property.Beforehand you and the seller agree at a price(usually the as is price) and when the renovation is done and put on the market and sold...the seller gets their number you make everything else.
Hey team have a potential deal I want to live in a 17 unit 4.2 mil- completely paid off seller want 50% down, we are discussion balloon terms - needs some help
As a prior telemarketer, I would never use the word "novation" simply because it starts with the word NO and you don't want the word no on their lips. Just because it starts with the word no makes it easier for them to say no. Partnership is so much better.
Seller finace is crap, who the hell would do that and why would they do that , the seller wants there money now, i dont want payments for the next 20 years , hell some people will be died by then, lots of realtors in my area said they dont work, you can always ask but waste of time
The problem with virtual assistants though is, like you mentioned, they're typically not American, don't speak very good English, don't know the local real estate market, and people don't like being solicited by strangers who hardly speak English. I paid a virtual assistant for like 4 months and only got one deal from it and just barely broke even. It's difficult to get good skip tracers, virtual assistants, etc. Let me know what your experience has been, thanks.
Snap Pace apart of the BP group now? Man I remember when BP first started in my city, I went to one of the first events. Great to see how far BP has come.
Question how do you go after a municipality if they "stole" your first SF investment house via deceptive means, that you bought in the LLC name? My wife feels that if we bought in our names we would have more sympathy or legal options for going after the City. I'm at a lost and exhausted with trying to get some compensation for their "theft."
If I was looking for an acquisition assistant to manage finding deals should I pay them by commissioning deals lets say 50$ per successful acquisition of worthy deal?
$50 seems extremely low personally, but there might be some laws regarding fees/rewards if they don’t have a real estate license. However, if someone keeps finding me successful deals and all I would have to pay is $50, that’s a huge win. LOL! But they will eventually realize their worth and hopefully setup a contract with you going off a percentage of the sale. Always reward the people who find you rewards.
rental apartments? like, own the building right? - if so, Its the same thing.... You can seller finance ANYTHING. .. Agree on a price, set the terms for the deal, Deposit, monthly payments, any interest? etc. and youre off to the races...
Great episode, as a realtor I have been told multiple time net listings are illegal. It might have changed but I’ve been in the business for about 10 years now so I guess it must have been a problem
Awesome video man, really like your podcast with Brandon and David as well on creative financing! Can you shed some insight on the paper work side of things after locking up a deal, like how do we draw up an official contract with someone. Just hire a real estate attorney to draw up all the paperwork after the deal or do you have say a blank template so you can quickly get it done or what??
Be sure to find a real estate attorney locally that is comfortable and understands your needs first. There are many out there who will look at you - deer in headlights. seek the property title and attorneys and you should do okay ! '
