Sorry, I can’t answer your questions, but you may want to go to www.legalwiz.com, hosted by Bill Bronchick, a real estate attorney (he sometimes hops in here, too.) Bronchick seems to be a good source for legal info, including info on getting and keeping property out of your name, and limiting liability (he also has some courses listed on this site and his on this toipc). I’ve been to one of his seminars, and he is very knowledgeable and helpful. He has some articles on his web site, and on this one, too. You may want to read those first. Hope this helps.
Hello…I’m sorry that this is such a long post, but I really do need some good advice. I just don’t know of any other people to talk to about my real estate investment problems. This seems like the perfect place to get some good advice. Thank you so much for your time. I have bought several properties in the past using creative finance techniques. For example, I would get an offer accepted for 70% of the market value of a home and then find an investor to put up the money based on 70% LTV. Sometimes I would have the seller carry back a second for 10% or more if I needed the money for something else such as fix-up, etc. When I was done with fix-up, I would sell for a healthy profit. After doing several deals I messed up in a huge way. I bought two fixer properties and let two separate investors talk me into 6 month repayment in full. I thought that I would have time to fix up and refinance or sell. Well…it didn’t work the way I planned. After the six months was up, one of the investors filed suit against me for not paying his money back in full (he didn’t want the property back). Of course, I wasn’t smart enough to have these properties in a LLC or Corp. I never even thought about it. This put my wife and I in a position where the only way out was to file Chapter 13 Bankruptcy. I am 35 years old and have been studying creative real estate finance since I was 20. I love it! Now I am scared…I am not supposed to incur any additional debt without the Bankruptcy court’s approval. It seems that one mistake has cost me my real estate investment career. I have been told that I should form a Corporation or LLC, so tehnically, I would not be buying the properties (my company would). What do you think? I haven’t bought any property in about 2 years. I am definately at a standstill. To be totally honest with you, I don’t know how to proceed with real estate investing without putting my name on the line. I feel that I am armed with all of this knowledge on how to buy real estate, but I don’t know how to do it without putting my family in financial jeopardy if I mess up again. The lawsuit was very stressful and financially draining. I don’t want to go through that again! I know of two nicer single family homes right now that can be bought using creative finance techniques. The first one is an REO that is appraised at $128,000. I think it can be bought for $80-90,000. The other is appraised for 145,000. The seller is out of state and rents it for $750 per month. He has had it listed for 2 years wihtout any takers. The market in the small mountain resort town where I live is very soft at the current time (Buyers Market). I was thinking of a Lease Option for 2-3 years and moving my wife and two girls into it. I could search for a buyer or purchase within the 3 year period. If I did a lease option, do I need to do it in a LLC? What about the first property? If I made an offer of $80,000, how do I sign the offer? Do I sign ABC LLC? or ABC inc.? You see, the only thing keeping me from buying and selling real estate is I don’t know how to organize it to keep my liability at or near 0. Another example of me not knowing what to do is this : I find an investor to lend me 70% of the fair market value of a home (I have done this several times). He makes the money available to me (in my name) at closing. How do I tell this investor that I am not taking title in my name? I have to tell him that I will be buying in my company name. It seems to me that this will scare off a lot of investors as they will realize that I am trying to keep my liability down. Like I said before, I just don’t know how to buy and sell without putting my name on the line. I know some of you probably think that I am being paranoid, but if you ever get sued you will unfortunately understand what I am so nervous about. Again, I totally appreciate any response. I just don’t know how to proceed from here. Thank You so much for your time. Dave