How to flip a home with a restriction

4 Replies

When a bank's short sale approval letter has a restriction that the subject house cannot be flipped within 30 days , can you sell your interest in an LLC and comply with the restriction? Are there strategies that investors use in order to facilitate a back to back close that are lawful?

No & No.

I asked these very same questions yrs ago when the lenders first started with these BS restrictions on their SS approval letters and I understand very few investors/attorneys were successful in removing the 30 days verbiage back than!

 I'm not an attorney but you may be on the hook for fraud if you try go around the restriction.. 

Thanks Luiz. Thanks for your reply . That's exactly what I suspected. I conferred with a real estate attorney who handles short sales in my area and he also pointed out that you can not sign an agreement to sell a property until after you own it.

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I'm not an attorney and this is not legal advice, but if the LLC interest exchange is off the land records, then the owning entity will not have changed and you're probably in the clear. However, the verbiage of the restriction might include that. Have your closing attorney handle the LLC change too and they will let you know if they will do it or not.