Very cute, wise guy–who can’t spell. I believe the woman’s name is “Pelosi,” not "Pelousy. I never said California was perfect. It has its problems and a few quirky laws, too, but when the real estate market is good in California, the appreciation rates knock the socks off of practically any other market. It would be interesting to see how people would react if the legislature tried to enact a mortgage tax. Hopefully enough citizens would be incensed and be willing to object vigorously. My feeling is that in some states, too much of the population is either too lazy or not outraged enought about certain things to put up any fight. They just roll over and let these goofy laws get passed.
Making my properties look over-mortgaged - Posted by Handy(MN)
Posted by Handy(MN) on March 09, 2008 at 12:57:49:
I have some free and clear parcels, as well as some with smallish mortgages, making me vulnerable to a lawsuit. I don’t really need the cash that refi-ing would provide, and don’t like paying lender fees anyway. I’d like them to appear to be over-encumbered by debt. I do carry plenty of insurance, but that’s only part of the solution.
I know I use one of my LLCs to put a mortgage/lien on another’s property, but what if I just filed an “Affidavit Regarding Real Estate” (the kind used to cloud a title and protect a deal)? It would reference the existence of a “substantial promissory note.” on the parcel, and avoid mortgage registration tax. Is that an appropriate use of the Affidavit, and would that help keep litigious tenants and their opportunistic attorneys at bay?
i put down a 500 earnest money deposit on a HUD forclosed property 3 MONTHS ago, after getting an accepted offer. Is this normal to take so long? i call for check ups with my realtor. He keeps telling me the title paper work is messed up and that they are working on it.
the tax is a small price to pay in order to make your property look over encumbered and not a good target for suing.
you may find the tax amount to be cheaper than forming and maintaining an LLC or Trust.
Unsecured note is not a lien - Posted by John Merchant
Posted by John Merchant on March 09, 2008 at 14:49:14:
An affidavit is a document, the contents of which, the signer swears is true…and signing a fictitious doc is a crime, called perjury.
So I’d think you wouldn"t want to do that in the case of a fictitious lien…would you?
And you might owe a dozen notes but none is a lien against particular RE unless it’s secured by deed of trust or mtg on a particular property.
Also, if I were researching these liens to your LLC I’d sure be interested that you had not paid your “mtg registration” tax and I’d want to ask you some hard questions, maybe under oath in a deposition, about what was going on.
So while I like the idea of loading the property with those liens to your own LLC, I’d sure feel better if you treated them just like any other lien to a lender and paid that tax so they’d look totally genuine.
Oh, and I just had another thought…I’d bet that in your state (MN) the county recorder wouldn’t record any D/T without proof that the mtg regis. tax had been paid. I know that no county tax assessor (our recorder) in my State of WA will permit recording a deed without proof of the pmt of our excise tax.
Re: Unsecured note is not a lien - Posted by Handy(MN)
Posted by Handy(MN) on March 10, 2008 at 06:23:23:
Hmmm, so does every promissary note need to be accompanied by a recorded mortgage (on which mtg. reg. tax is paid) to make it valid; that is, is every loan to someone who owns property considered a mortgage or DOT?
Re: the fictitious doc/perjury…I’m always lending money back and forth from one LLC to another or to myself (and documenting it), so there would be a paper trail.
Beyond the obvious “avoid unsafe situations that can invite lawsuits,” can you see any solutions short of mortgaging everything to the hilt? Maybe I should deed everything into Land Trusts to mask ownership?
Posted by John Merchant on March 10, 2008 at 10:30:48:
A is, by itself, never a lien.
“Is every loan considered a mtg or DOT?”
Absolutely not!
A mtg or DOT is a separate, stand-alone instrument that must be recorded in order to constitute a lien on RE.
If you just got Joe Smith to sign a note to you, that would NOT consitute a lien on any property Joe owns so you’d have an unsecured note and no lien on anything Joe owns.
Trusts are a great tool, but the way the “guru” bunch promotes them is in my book disgraceful as a trust you’d create and then control is NOT any kind of shield for you and they’re too prone to penetration without a lot of careful planning by you.
Much better and simpler to just deed your properties into an LLC, (before any liability has arisen)as that simple act gets it out of your name and if/when a lawyer is Googling you to see what props you own, he won’t find any.
When that enemy lawyer finds YOU own no props he/she’s going to lose any interest in suing you.
And a further tactic that Jeffrey Taylor (Mr. Landlord) uses and I like a lot…he’s never the owner or the boss, just an Assistant Property Manager flunky as per his business card, and he works for that big old co./LLC and he doesn’t know anything or make any decisions, etc…
Unbelievable! You mean Minnesota and Washington charge excise taxes or a mortgage registration tax? What a bunch of crap. What will they think of next to tax? I’m in California, and there is NO such idiotic tax for recording a trust deed. If I were you, I’d just record a Trust deed that is securing a line of credit. Doesn’t mean that you have to take out any money or use the line, just have it available.
Wow, to think CA has anything any investor would want !!!
After all you’ve already got Nancy Pelousy, the most illegal immigrants and left-wing pols in the country so how could you ask for anything more?
If I were you I’d be very careful about even whispering about any tax CA does NOT now have as they’d run over each other in Sacramento getting a bigger one passed.
- Posted by blucat