I'm in the process of acquiring a hud property that I'm titling under my LLC. To avoid doing a double closing I want to sell my LLC to my end buyer to save on closing cost. Can anyone give me some insight on how to sell my LLC. This is a Maryland LLC.
I would suggest starting with an attorney.
If you admit the buyer to the LLC through the Operating Agreement he can bring capital in and buy out your interests and then you withdraw from membership through the Secretary of State, this can be easier than just selling an entity but you could do it as a purchase upon his being admitted. State laws vary and your Operating Agreement should specify how members are omitted and withdraw from membership, even some deadhead internet agreement should address this, otherwise and additionally, it will be by state law.
You will need a "closing" statement, an accounting of the value paid, funds received and costs associated with the transaction (like the attorney's fee) along with tax filings.
So, yes, see your attorney. :)
Bill Gulley, General Real Estate Academy | https://generalrealestateacademy.com
I have an additional thought to add since you mentioned the goal of doing the LLC interest transfer is to save on closing costs. Each state is different and I'm not sure of the particulars of Maryland law, but equity transfers can sometimes inadvertently trigger a transfer tax even though no deed is recorded. An equity deal will not involve the fee to record documents with the land records, but transfer taxes may apply and can be a big chunk of closing costs. There is no uniformity whatsoever state to state on how the legislature decides to handle this, so this is just another reason to have any attorney structure this properly to meet the goals you have in mind.
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