TrueHardMoneyLender

Welcome. As you can tell I am new also. New to the forum but not new to RE investing. So we get to know you better can you make some broad comments about your investing focus? A few comments about the law practice's focus would also be good (things that your firm does well, things that your firm tends to refer out rather than handle directly).

This is more to the group than to Craig... Definitely check the details closely. Maybe even consider paying a lawyer as you might not get the facts correct if you are not careful. Most states have the idea that a 'foreign' entity conducting business in the state needs to be registered with the state. Something about needing a clear way to serve notice if there is an issue. Note that part of the issue is the definition of what constitutes 'doing business' in a state. Buying and selling might not be seen as doing business while owning a rental could be. If the 'create an LLC sites' do not provide clear advice who are you going to depend on later? In one state I am familiar with the cost for the annual filing as a foreign entity is the same as the cost of just being registered in that state (this is for an LLC). Hence it might not be advised on a cost basis to register an LLC in NV and then have to file in the state or states in which you do business. Getting the legal set up correct and knowing how to then operate year to year so that you are not losing the protections afforded a legal entity might be well worth the cost of a lawyer. Be careful about trying to save money on the front end and creating unexpected legal liability later. Only you can decide at the end of the day.

I would say that it depends on the numbers. How much will it cost over the period of time you are likely to pay? Do you have confidence that you will recover that amount when you find a T/B? If so and you feel the profit margin is there consider agreeing to paying. Maybe reduce the price by $1,000 or what ever the estimated costs are for the utilities and the landscaping. On a different level why does it matter if you put in zero cash or some cash? It is the return and the time to earn the return that should drive the decision to even go forward. If you walk from the deal because you do not want to pay the utilities but that means walking from a clear upside within 4 months I would say you have your logic backwards. If you are really not confident of finding a T/B then maybe that is an indication that the deal is not a good one in the first place independent of the negotiation point.

A trust will not provide liability protection. At best it reduces the chance that someone will notice who the beneficial owner is.

A person should shop around when looking for hard money. Many such lenders operate locally. A true hard money lender will not ask for a credit score or even payment history. They only look at the equity. Cash back is possible. When you start to push the edges (large cash back, higher LTV) then you start to see people asking about other things such as credit. There are a few larger players but even they do not operate nationally. Here is a simple way to think of hard money. If you find a great deal but you have no money (too many deals at once, etc) then the books and tapes say to find a partner. You will do a 50/50 split of the profits after you return their money. They become your partner and actually will have a say in what you do as a partner. Normally you end up with them on title or something similar. A hard money lender is a silent partner who is looking for a lot less than a 50/50 partner. They remain silent and do not expect to be on title other than as a lender. Hence you get to run your own show. If it works out that a 50/50 split of the profits is better than borrowing on hard money terms most of the time this is because you are dealing with a dog of a deal or the asset is not worth enough (new construction where you need a loan on what might be rather than what is).

Just how expensive would the pre-pay be? It might be less expensive to pay it than to hold and miss out on the other side. You have not been in the property for 2 years. Check to see if you qualify for an exception and therefore could get the maximum tax savings for your residence if you sell now. You are coming up on the 2 year mark and might just hit it anyway. The goal is to move and to make it tax efficient. Holding a third rental might not be required. As you noted if you were to take the profits and put them into a property in the new market you might have better upside. You did not mention if you need to buy a home to live in there. If you move the cash to buy a larger home then you need you would not be much better off. If you can buy both a home to live and a rental or otherwise use the extra cash to buffer any problems with the two present rentals you might have a real winner. It might take a while to sell in the present market so be prepared for a holding period. John Corey