GURU help needed to clarify non-assignability
I divided up my question into the following scenarios. Please help ,
Using my own name to buy:
if I am buying property under my name(i.e.No LLC, nor Corp nor land trust) AND the contract is non-assignable (bank-owned), is a simult. closing the ONLY way to go? will that solve the non-assignability issue? Remember, I can not use "Josh and/or assigns" ...
Using my entity name to buy:
if I am buying property under my entity(i.e.LLC, Corp or land trust) AND the contract is non-assignable (bank-owned or from MLS), do I sell the entire entity or do you sell the 'interest'? I understand that selling only the interest won't help with making contract assignable since the name of the buyer changes. Selling the whole entity would work because the name of buyer will be the same(i.e. SunShine LLC).
How did you do your flip? Thanks a bunch in advance. It all sounds confusing right now,
thanks, Josh
Josh,
Welcome to TCI!
To answer your questions:
When buying in your name, you will most likely have to do a double closing. With bank REOs, you can get away with assigning it without putting "and/or assigns." You should check out this article written by Scott Rister called, What Do You Mean I Can't Wholesale A Bank REO!!!!. It explains a creative technique that Scott used to resolve the "flipping" problem associated with bank REOs.
Using my entity to buy a property is better for flipping. With a land trust, you just reassign the beneficiaries. With an LLC, you just sell the interests to the new buyers. You should consult a real estate attorney and CPA about the legal issues and tax benefits involved with each method.
I hope I answered them ok. You should always consult a professional before acquiring a property. Their job is to help keep you out of trouble with the laws of your state...
Tanya