How do you own your home?

[Skiboy]

I own my home in my name and I’ve heard this is not the way the rich own their real estate. How do they own it then?

The reason I’m concerned is I pulled my credit report and it shows I have 85% debt to credit. I have one credit card and mortgage on my report. Other then that I have excellent credit but this debt to credit ratio is scary. I applied to chase for a Credit Card and was denied. They still have yet to send me a response to why they declined me but this is the only reason I can think of.

So how do you own your home and not have the mortgage or title in your name, credit report?

 

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[lightning]

I own my home in my name and I’ve heard this is not the way the rich own their real estate. How do they own it then?

The reason I’m concerned is I pulled my credit report and it shows I have 85% debt to credit. I have one credit card and mortgage on my report. Other then that I have excellent credit but this debt to credit ratio is scary. I applied to chase for a Credit Card and was denied. They still have yet to send me a response to why they declined me but this is the only reason I can think of.

So how do you own your home and not have the mortgage or title in your name, credit report?

Question; Are you looking to simply lower your debt-to-income ratio? Or are you looking to seperate your personal life from your business investments (aka real-estate).

Once an investor begins incurring liabilities, a good way to protect yourself is to set up an LLC (Limited Liability Company), say, "John Doe Real-estate Holdings, LLC". This will ensure that if you ever encounter a legal problem or get sued, the person can only go after your company. This prevents them from going after you personally, and trying to bankrupt you. I think this may be what you are referring to when you mentioned "how the rich hold real-estate". (Sort of the "own nothing, control everything" mantra ).

If you are simply looking to lower your debt to income ratio, a good way to do that is to keep your revolving debt as low as possible, and try and keep your personal loans to a minimum. As you pay your debt down, this ratio will decrease and will help you secure more loans. Also, dont be as concerned about your debt-to-income ratio, as your credit score. Your CREDIT SCORE will be what lenders primarily determine to view how risky you are as a borrower. (a bank will be MUCH more likely to loan to someone with an 800 credit score, but a high d-to-i ratio, then a person with a 625 credit score, with a very low debt-to-income).

Hope this helps.

 

[Allthingznew]

I own my home in my name and I’ve heard this is not the way the rich own their real estate. How do they own it then?

The reason I’m concerned is I pulled my credit report and it shows I have 85% debt to credit. I have one credit card and mortgage on my report. Other then that I have excellent credit but this debt to credit ratio is scary. I applied to chase for a Credit Card and was denied. They still have yet to send me a response to why they declined me but this is the only reason I can think of.

So how do you own your home and not have the mortgage or title in your name, credit report?

Debt to credit ratio? That means you're using 85% of the credit you have available to you. Paying down your credit card will help that. It's better to have 2 cards with $1,000 limit and $250 on each of them than it is to have one card with $1,000 limit and $500 on it. The difference is not the amount of debt, but the amount of available credit.

I don't think your mortgage is included in this ratio. It is for debt to income though.

 

[Russ H]

As my sig says, we control things, we don't own them.

You can have an atty set up a structure which works for you. I will not give specifics on ours, for obvious reasons.

Our structure is set up in such a way that it would be incredibly difficult (and time consuming, and expensive) to try and litigate and collect on a judgement.

Litigation is the easy part-- collection is NOT easy, so any smart atty (once they see how things are set up) would counsel their client to sue someone else.

-Russ H.

 

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[8 SNAKE]

Once an investor begins incurring liabilities, a good way to protect yourself is to set up an LLC (Limited Liability Company), say, "John Doe Real-estate Holdings, LLC". This will ensure that if you ever encounter a legal problem or get sued, the person can only go after your company. This prevents them from going after you personally, and trying to bankrupt you.

Not to pick on you, but I don't think this is an accurate statement. Forming an LLC can help to put a layer of protection between your business and your personal assets. However, the formation of an LLC does not prevent your personal assets from being at risk in the event of a lawsuit. This would hold especially true if you had to personally pledge the debts that your LLC holds in the first place.

 

[lightning]

Not to pick on you, but I don't think this is an accurate statement. Forming an LLC can help to put a layer of protection between your business and your personal assets. However, the formation of an LLC does not prevent your personal assets from being at risk in the event of a lawsuit. This would hold especially true if you had to personally pledge the debts that your LLC holds in the first place.

Ahh you are right, I should have clarified that (didnt mean to leave that so vague). I was trying to explain that most of the rich as he mentioned do not hold real-estate assetts in their own name, and that an LLC is the primary and easiest vehicle to do so. Didnt mean to make it seem as though they were bulletproof. :smx4:

Thanks for clarifying

 

[Skiboy]

Thanks everyone,

I don’t really understand putting your personal property into an LLC business structure. How can you classify your home as a business when your not in the business of having it as an investment property? I hope it goes up in value but I’m not counting on it.

Equifax shows mortgage account with a balance of 219,113 and limit of 228854
Installment accounts $0
Revolving accounts balance 1152 and limit of 33325

Total accounts 220265 limits of 262179 totals

220265/262179=.8401321

This is exactly what it says on the report, debt to credit 84%

I don’t understand how they get the limit on the mortgage account but I’m thinking I can do a couple things to improve it. Pay down my mortgage more, or ask the bank to increase my heloc. I don’t understand why that’s not classified as revolving but it shows up under the mortgage account, so go figure…or should I get another credit card to increase my revolving limit.

 

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[8 SNAKE]

Thanks everyone,

I don’t really understand putting your personal property into an LLC business structure. How can you classify your home as a business when your not in the business of having it as an investment property?

Lighting and I weren't talking about putting your personal home into an LLC. We were talking about putting your investment properties into an LLC to help put a layer of protection between your personal assets and your business assets. Hope this helps.

 

[Skiboy]

8 Snake, thanks.

Is there a way to separate your personal property from your name/credit file? Thanks again for all the responses.

 

[8 SNAKE]

Is there a way to separate your personal property from your name/credit file? Thanks again for all the responses.

I'm afraid that I can't answer that question for you. Hopefully someone else will chime in with some information.

 

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[Yankees338]

8 Snake, thanks.

Is there a way to separate your personal property from your name/credit file? Thanks again for all the responses.

I've heard of people purchasing homes under an LLC and then renting to themselves.

I'm not sure if that's true or not, but it's something you may want to look into. Can anybody verify that?

 

[hakrjak]

I have mine in my personal name, which I know is a no-no -- but I've also got 100% of the equity pulled out and used in other investments, so it's not like someone is going to hurt me much by taking my home away.

I have not had any negative credit implications from doing this, and am still considered A paper.

Cheers,

- Hakrjak

 

[Russ H]

I have mine in my personal name, which I know is a no-no

Hak, ya continue to surprise me.

How about all the others?

-Russ H.

 

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[hakrjak]

Right now, after I've been selling over the past 2 years -- I'm down to only 4 others at the moment -- All in my name. I'm still carrying that million dollar umbrella in case of liability issues though, so I'm not completely bare-a$$-naked

Honestly, I have an LLC -- but getting the properties into it seems to be a major hassle. We've had some long threads about this both here and on the RDPD forums.

Cheers,

- Hakrjak

 

[Russ H]

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wow.