I have a seller who is open to letting us take over the payments.
The way we were looking at structuring it was to have the seller put the property into an LLC, and have an operating agreement that lays out the structure/terms. This way the seller is still on title technically, but by way of the operating agreement we have the ability, to rent/rehab etc.
Any input would be appreciated!
Does the bank have a Due on sale law?
Terry, how did/is the subject 2 working out for you?
Transferring into an LLC is same as selling to you, as far as any due on sale clause, as it is Not technically still in the owner's name.
Let's not change the topic getting off in vague questions.
Wayne is correct as to the risk. You need the ability to exit this type of transaction quickly, buy it, refinance it or sell it to obtain cash to pay off that underlying lender.
Otherwise, yes, the Operating Agreement can make sufficient provisions for you to lease, manage and profit as well as to "buy in" based on principal reduction or other agreements.
I applaud your strategy but this is not a DIY document, see an attorney! If you really want to protect your interests and secure the property, use an attorney. Yes, it may cost something, but you could then use that Operating Agreement in a hundred more deals reducing the cost of the fist one. :)
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