I'm in the process of submitting my first offer today, and my realtor is struggling. She has done great in helping my partner and I find the property so I don't want to drop her on the deal even through she is proving to be inexperienced in investor deals.
She has sent 3 different contracts to us so far: 1. our names with the LLC as a "hyphenated" last name, 2. only our names. 3. LLC name, but us as buyers in the signature
I have explained I only want our LLC name on the offer as the buyer as to utilize it as it's own separate entity. She does not seem to get it or think its possible. We finally were able to convince her to write it only in our business name (but again, our names as buyers on the signature lines), however she does not know how to send it out to both of us to sign via the electric signing program.
At this point I don't see any reason why both of us need to sign. Can't just one of us sign on behalf of our LLC and be done with this?
Can anyone in the community who have experience putting offers with your LLC please advise.
Colorado could be different than Texas so here is my attorney disclaimer that you need to talk to one as I am not an attorney. On CO contracts the LLC entity name goes in at the top of the contract and that will be the name that takes title to the property. Directly below the LLC name goes all the names who are signers for the LLC. Your names have to go there or else you won't be able to sign electronically.
Secondly, who signs depends on how your operating agreement is written. If it is written so that a specific person (not a generic one person) signs for the LLC than only that person should be signing for the LLC. I am guessing you don't have an operating agreement for the LLC, in which case I would think it's important that all members of the LLC sign the contract. All members will also need to sign all other disclosure forms and be present for closing signatures.
As an after thought for future transactions. Notice future transactions, don't bail on the Realtor you're using now. I would consider finding a Realtor who also invests as you are investing. It's important to have a Realtor on your team who knows how to structure an investment and can tell you whether or not your investment is any good.
If you are questioning how you think the realtor will handle this transaction, you might want to cut the cord now. You are early in the transaction. It will only get worse when you are knee deep in Sh*t.
To second what @Colin Smith said, it depends on your operating agreement for the LLC. If you already have the LLC formed, that should be the name that is used at the top of the contract. On the signature page, you would have the name of the LLC, the name of the person signing, the signature, and the title of the person in the LLC (Member, Managing Member).
If you don't have the LLC formed yet, it is fairly easy. Just put your names in as the purchaser, and include "or their assigns". Then sign individually.
Also not an attorney, so ask one. But that is how I've done it in VA (with the advice of a VA attorney).
As @Colin Smith indicated, that's how I have done my LLC transactions in Georgia.
Additionally, the closing attorney requested power of attorney from the other partners that enabled/directed me as the sole person responsible for the transactions on the LLC's behalf.
So, multiple signatures are not needed.
The deed was done in the LLC's name.
Congrats on your new purchase.
In general, the LLC is listed as the contracting party and 1 "officer" signs the agreement. The officer can be 1 investor or even an employee who owns 0% of the company. The LLC's operating docs should spell out who is or is not authorized to enter into contracts on behalf of the company. Ideally, the majority owner should be signing.
Thanks everyone for your input, that was exactly what I was looking for! Amazing how when in a pinch and time is short, the answers come so quickly from the BP community.
We have had our realtor prepare or final contract with our LLC as the purchaser on the top of the agreement, with my partner and I (each LLC "members") as the signers.
@Trevor Sambrano keep in mind you are talking about an area of law that is state specific and none of the posts are from people in your state. Their advice is great for their states but not necessarily for yours.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing