Red Flags on a Deal?

2 Replies

In option with a multi-family property. On each of the leases, there are several different LLC's listed on the leases. Sometimes two different LLC names on the same LLC as a property manager, the other as owner, or the other to send rental pay. Yet, all LLC's are from the owner. Furthermore, the address to send rental pay is the address to the realtor, that never disclosed she has an interest in property. Furthermore, they have said they did not keep books (income/loss statements).

Is this normal? Red flags?

You should always trust your gut! That said, if you're looking to buy this property, the most concerning thing is the lack of book keeping. How are you able to confirm the deal is "good" without seeing the books? Having multiple LLCs is not likely a red flag, nor is the realtor being involved in the deal. Some realtors do and some do not invest in their own properties. 

Again, without the "books" to review, I would be hesitant anything they're saying as far as how the property is performing.

@Renee Thomas  If they say they don't have books, ask them what their expenses are (ex: landscaping, utilities, etc). Then, try to get the property under contract without any hard money, and then ask for bank statements for that property to verify what is hitting the bank.