Pros & cons w/ doing Lonnie deals in an LLC - Posted by Steve

Real Estate Investing Real Estate Law
#1

Posted by Kelly on July 27, 2007 at 08:49:39:

It’s been a while since I looked at it, but Texas deeds of trust do allow non-judicial foreclosure sales via a trustee, the trustee does not have to be a lawyer (at least they didn’t 5 or 6 years ago), now the non-judicial foreclsoure may not apply to personal property such as an MH but that wouldn’t be a problem with LH deals, if not a LH deal then check non-judicial repossession of motor vehicles since MH are titled thru the DMV.

Another consideration is that a property manager in Tex. doesn’t have to be represented in JP court by an attorney for an eviction, I pulled the case law on this just a few weeks ago. If it is that huge of a concern you may want to go that route.

#2

Pros & cons w/ doing Lonnie deals in an LLC - Posted by Steve

Posted by Steve on July 27, 2007 at 08:29:11:

I’m considering doing Lonnie deals within an LLC to help reduce liability. However, in Texas, an LLC or corporation MUST be represented by a lawyer in court [even a corporate officer or LLC member/manager cannot represent the entity unless they’re licensed lawyers]. If I financed/sold all the homes in my own name, though, I could foreclose on a property myself. Otherwise I’d have to hire a lawyer each & everytime I had to foreclose on someone.

This is the only problem I see with using an LLC…having to pay a lawyer. LOL.

How big of a problem is this, considering foreclosure rates are rather high in the Lonnie-deal business?

And do you guys see any other pros/cons of using an LLC?

Thanks in advance!

#3

Re: Pros & cons - Posted by ken

Posted by ken on July 29, 2007 at 17:36:05:

I am in NY state and a couple cities here say the same thing.I have a friend who owns his houses in an LLC and does the evictions in his own name.He has never been caught and if he does he knows he will have to start over with an attorney,but noone ever looks up ownership and no one has realized it yet.

#4

Lonnie deals in an LLC - Posted by Anne_ND

Posted by Anne_ND on July 27, 2007 at 08:53:36:

Steve,

I’d suggest you form your LLC and have an attorney do the repossession or foreclosures for you. You should always use one the first time around anyway, as an educational experience.

Foreclosure is a step-by-step process. First you talk to them about not paying (maybe even pay them to leave), then you serve them, then you go to court. At any point in the process you can reach an agreement to get the people out before going to court.

In 4.5 years of doing Lonnie deals, I’ve never foreclosed on a home (although I came close recently), that is, had to get an attorney go to court.

If you screen buyers well, and then try to work with people who turn out not to be able to afford your MH, you can avert most of the issues. Then just build the cost of attorney-assisted foreclosures into your business plan. A couple of times I’ve paid my attorney to write a letter, but other than that, usually people will leave peacefully, and will leave the home in good shape. A few times I’ve paid them.

good luck,

Anne