Upper Marlboro, MD · Member since 2012 · 13 posts · 0 votes
Is it common practice to submit offers in the property address LLC. For example, 1234 Madison Street LLC as the name of the buyer. Then upon ratification, establish the LLC? Is this ethical and/or standard practice among investors?
Investor · Louisville, KY · Member since 2011 · 1k+ posts · 1k+ votes
14y
I don't think it's necessary to use an LLC to submit an offer. I would wait until you get under contract, then establish the LLC and notify the necessary parties that the LLC will be the "buyer".
If you did take your approach, I'd be certain to check with the appropriate state department to make sure the LLC isn't already taken. Also, if you did want to submit a contract with an LLC and not your name on it, why not create a "buying LLC" just for writing contracts/making offers. Then once you get something agreed upon, you can always transfer title to a new LLC or just make the purchase with the new LLC instead of the "buying LLC". This would also open up the possibility of making the "buying LLC" the owner of the property specific LLC.
Ex.
LLC 1 - CashBuyer LLC
LLC 2 - 1234 Madison Street LLC
You own CashBuyer LLC, submit offers with this etc. When an offer is accepted, create 1234 Madison Street LLC with CashBuyer LLC as the owner and then hold the property in 1234 Madison Street LLC.
This approach would also add an extra layer of protection and wouldn't require you to submit offers in your own name or make a new LLC every time you want to put in an offer.
Investor · San Ramon, CA · Member since 2011 · 1k+ posts · 569 votes
14y
Downside to that... Someone is looking to see who owns a Property... ahhh... 1234 Madison Street LLC. Hmmm, who'd they buy it from... CashBuyer LLC? That strikes me as strange... what else did CashBuyer LLC buy...
They now have a list of every property you've bought as you've essentially tied every LLC together through the single purchasing name.