Flipping REO properties
I have come across several REO deals with a clause that does not allow me to flip the contract. Rather than do a double close, can't I just transfer title to the investor
Any suggestion would be greatly appreciated.
Take title in the name of an LLC and sell the end buyer the company. Or make the end buyer a partner in your LLC in which you are taking the property and have a contract with him/her to buy you out for your "assignment fee" once the property is aquired. This has the advantage of using the end buyer's financing (this you don't have to get any) and it saves the transfer tax since the title stays in the name of the same entity.
Please do check with your attorney to be sure this will work in your area but I know it works in mine.
[addsig]
PLEASE EXPLAIN WHAT A 'LLC' IS, AND HOW IT WORKS.
An LLC is a business entity in which the property is held. LLC stands for Limited Liability Company.
You can place a property into the LLC and sell the LLC to the investor. That way there is no transfer tax because you didn't transfer the title (the LLC still owns it). The only thing that changed was the owner of the LLC.
Tanya[ Edited by tanya1215 on Date 05/15/2003 ]
what type of paperwork would be required in the transfer? thank you
Do you just make up a LLC? How do you form an LLC?
[addsig]
You have to go to the Sec of State in Florida and get their info. They will have some on line and you may be able to even form it online. You can in Texas and the fee here is $200
Good LUCK and Thank You
Hope this helps some
Ted Jr
In a way you are making up a name for the LLC, but you have to check it to make sure no one else has that name before you form the LLC or Corp. You can find forms in FL from the Department of State - Division of Corporations, which you can download the documents online and it also has the filing fees. Forming an LLC is $125 and a Corporation is $78.75. The website for FL Division of Corporations is http://www.sunbiz.org and it also contains answers to FAQs.
Tanya[ Edited by tanya1215 on Date 03/07/2004 ]
Tedjr,
So in Texas you can file an LLC for $200 What do I need to do? Do I have to have an Attorney? Can I do it online and do you know the website?
TIA
Jar[ Edited by jar on Date 03/07/2004 ]
Maybe it is obvious but to me some folks seem confused. Hence this post.
LLC - Ignore the initials. It is really nothing more than a company. The suggestion is to form a company and let the company buy the property.
Forming a company is extremely well understood process but it definitely varies by state. Start there. You can find services on-line that will create a company for you.
Do watch out as there are cities that tax companies separately. Sometimes on the business assets, etc. Not like it would be a real issue in most cases but if you just pick a different city (next town over) you can avoid the issues.
You will need someone to file a tax return for the company. There are lots of accountants that advise you on that front.
John