Posted by Robert (NC) on February 10, 2002 at 20:31:11:
this is my first rental, when I get 2 or 3 more I will manage them all from a S or c corp due to NC having a 200 tax on LLC’s… I might change my mind after I speak to a Tax consultant and business advisor.
Right, I am useing a in house Bank mortgage for investors so I can build a history with this bank and work on building a line of credit with them. Hopefully by year end, I’ll have enough history with them to be able to get that line of credit up too 500k or so… which will be plenty to do one or 2 deals at a time (I’m only doing this part time for the moment) with out cash out of my pocket. My dream, do deals with the banks money, NOT mine…
Posted by Andy M on February 10, 2002 at 15:03:59:
In the book that I am currently reading, it says never buy and sell hoses under your own name. How many of you use a different name? What are the Pros and Cons of this?
… In the book that I am currently reading, it says
… never buy and sell hoses under your own name. How
… many of you use a different name? What are the
… Pros and Cons of this?
I never buy hoses under my name. I usually use a false name so nobody knows that I bought another hose.
If you use your own name to buy a hose, it could later be used against you that you had too many hoses.
You are better off using false names when buying hoses. The last thing you want is a hoser to come to your house telling you that you have too many hoses.
Posted by Robert (NC) on February 10, 2002 at 15:40:58:
Andy,
I do believe that if you look closely at what your reading, the authors are suggesting that you create a company and purchase the real estate with the company.
In my case, I’m buying the rental house in my name, then will transfer the DEED over into a Trust. That way as far as the Governent is concerned, the Trust owns the property. As far as the Law is concerned the trust owns the property, so only the trust can be sued and not me personally (at least that is the general Idea)…
Posted by Redline on February 10, 2002 at 17:25:57:
A trust does not shield you from liability. It clouds things a bit and makes the lawyers work a little harder to pursue, and does hide your name from the public record - and this it’s good for - but it does NOT provide asset protection as an LLC or a Corp would.
Robert, Good explanation, but I have 2 questions. 1)Why are you using a trust instead of a corporation? and 2) Why are you buying the house in your name and then deeding it over to the trust? Why don’t you just buy it in the name of the trust? Thanks in advance.
Posted by Robert (NC) on February 10, 2002 at 20:12:40:
Ahh, yeah your right… I must remember not to try and do quick responses when my wife is calling me down stairs to help with something…
thanks for catching the mistake…
Posted by Robert (NC) on February 10, 2002 at 20:24:18:
I was in a hurry when I wrote my reply… see about note above about the Trust NOT protecting you from Liability…
This is my first Rental, and I have a bank that has a very low interest rate on Investor mortgage if it is a SFH or a duplex. This is a smaller state wide bank that I would like to build a 500k to 1mil Line of Credit with within the next year. So I’m using their investor mortgage program. It requires me to put down 15%, NO PMI, the only fee(s) I have to pay are the 1% orgination fee. Since this mortgage is ‘so small’ I’m actually paying a min 400 dollar set fee. I also have to pay for the appraisal, but that is… Loan qual was my financaial statement and current W-2. Loan goes through anytime after the appraisal is completed.
anyway… Since I’m using the Bank, I have to put the Deed in Mine Name… However, they do NOT have a problem with me transfering the Deed to a Trust, AFTER I purchase the Rental unit. Also, since I’m buying the house for 20k under appraised value, the Loan officer said I could get a small line of credit the same day I close on the house using the house as collatoral. So I get the house with 15% down, no PMI, a 20K Line of credit, and in 3 to 6 months I can refinance with a 80/20 mortgage product which will allow me to pull all my cash back out of the house.
Not real creative, does tie 11k of my money up for 6 months, but I get that back in 6 months (if I don’t sell the house before then and refinance), And I get to start building a line of credit with this bank…
I orginally wanted to use an LLC, however, NC has a 200 dollar a year Franchise tax on LLCs. Since I do plan on keeping this for at least 5 years (good rental area), I’ve decided to put it into a trust.
After this deal is completed, I plan on studing more on lease options, subject-to’s, and Flips… I will do the FLIPS, contract assignents, and Lease Options in a S-corp name. Might wind up being C-corp, i’m not 100% sure at this point…
Posted by DavidV on February 10, 2002 at 17:42:04:
You can use a trust IN ADDITION to a corp. or LLC. For example you could buy a rental property taking title in trust and have your LLC be the beneficiary.
I don’t know how Robert is buying, but if he is using a bank they usually won’t let you take title in trust.
Re: LOL!!!..Just what I was thinking…lol - Posted by richard
Posted by richard on February 11, 2002 at 10:05:35:
Andy,
We’re not laughing at you my friend–just the way the message comes across with the spelling and all.
Now to help you a bit(I’ve tried to post this a couple of times but I think I’ve been awake too long or don’t know what I’m doing- -probably a little of both)
It’s all about cya. Go to the “HOW-TO ARTICLES” at this site and read “Top 10 Reasons To Incorporate” by William Bronchick . Next, go over to Bronchick’s site at Legalwiz.com and read his piece “Top 10 Ways To Get Sued”. It is in his “ARTICLES” section.
- Posted by Tim Fierro (Tacoma, WA)