Purchasing property anonymously...

15 Replies

I'm looking to buy a business (Pennsylvania private S-corp) and property. There is hostility between me and the seller and if he discovered I am the buyer, he would refuse to sell to me. I need to know the ways/methods by which I can remain anonymous to the seller and complete the sale. I already have a corporate name which I intend to place the offer in but the seller recognizes the corporation's address (which would be on the preapproval letter) as well as my personal address, which would jeopardize any dealings.  Any insight on how should I pursue this?

Local laws differ but it is fairly certain that you could hire a representative (a lawyer perhaps) and give them power of attorney to act for you. Contact a local lawyer to see if they can do this and what they would charge.

There's a few articles in the New York Times of how this is the new wave for investors and even seemingly 'private' buys. Just saves a lot of hassle I suppose. 

Thanks for the suggestions guys.  I've also been reading about forming an agency relationship with a broker, whereas the broker would act on my behalf as an undisclosed principal.  Anyone have any insight or experience with this?  At what point in the buying process would my identity have to be disclosed, if at all?

If you have buying cash, a land trust may be an option. Nestle the LLC under the land trust as one of the trust beneficiaries. The trust is cloak and keeps your anonymity. When obtaining a loan, the bank will want an LLC or individual on the note, so may be difficult.

I've read about that as well Romy.  But I think a broker acting as an indisclosed principal has less complexities.  And I would submit the offer in my corporation's name.

This is a great topic, love to see more strategies. But for your particular situation, if he receives an anonymous offer do you think he would recognize it as you? If so you might need an actual straw man, someone pretending to buy it for their own benefit. 

It might be as simple as funding an LLC, giving someone owner/ship/manager rights to the LLC, writing an IOU back for the cash, and pre-approved contract to buy property at X address and then that person exits the LLC and turns it back over to you for a fee.

So either way you will need a Lawyer involved at some point, so maybe just best to hire the Lawyer to be the straw man. 

Would selling to you financially injure the seller or increase the seller's risk in some way?  Is the hostility material?

@Mike Johnson

How badly do you want it?  Do you want it enough to pay double closing?

The first thing that popped into my mind was to find a wholesaler that you've worked with before (to reduce the possibility or treachery) and have him approach the seller ... and then do two closings.  I don't know how much of a hit that would be, since you're being intentionally vague on details ;) but it could be worth it.  Also, that would avoid the expense of having a broker work as your agent ... but again, since I don't know the purchase price, I don't know what kind of trade-off that would be.

Originally posted by @Romy Patel :

If you have buying cash, a land trust may be an option. Nestle the LLC under the land trust as one of the trust beneficiaries. The trust is cloak and keeps your anonymity. When obtaining a loan, the bank will want an LLC or individual on the note, so may be difficult.

Great Idea, we buy in Land Trusts all the time and to me, that's the only way to buy.  You can simply make the trust the street name and/or any name you like.  The seller will have no clue and has no right to no whom the beneficiaries are to the trust.  You can frankly hire a friend/colleague to be your trustee.  Seems like a simple deal.  Think about Walt Disney submitting a contract on anything-anywhere....  would immediately raise the price.  Trusts are the best way to go, good luck...

Bud, yes he'd recognize it as me because he recognizes my and my company's address (the lender also states my coorporation's address must be in the preapproval letter).  So, it's a matter of simply amending the articles to reflect an address change.  

You guys are commenting on land trusts a lot.  I know little about them except to say that here in Pennsylvania, you cannot avoid transfer taxes with a land trust.  How do you go about creating a land trust?  I know they're not registered with the state.  So under what premise and conditions would one exist?  How easy or difficult is it to create one?

Originally posted by @Kris Haskins :
Originally posted by @Romy Patel:

If you have buying cash, a land trust may be an option. Nestle the LLC under the land trust as one of the trust beneficiaries. The trust is cloak and keeps your anonymity. When obtaining a loan, the bank will want an LLC or individual on the note, so may be difficult.

Great Idea, we buy in Land Trusts all the time and to me, that's the only way to buy.  You can simply make the trust the street name and/or any name you like.  The seller will have no clue and has no right to no whom the beneficiaries are to the trust.  You can frankly hire a friend/colleague to be your trustee.  Seems like a simple deal.  Think about Walt Disney submitting a contract on anything-anywhere....  would immediately raise the price.  Trusts are the best way to go, good luck...

 Have you had success in obtaining loans/bank financing when purchasing via Land Trust ? 

If you want to do this right you really need to be working with a local attorney to the business and property who is an expert on mergers and acquisitions, entity creation, and business real estate.

Trust laws and all of that varies by state. So the little tiny details are what can come back and bite you if you do not get all steps right in the process.

At the end of the day the seller might not sell unless they know who the purchaser is and that is their right to demand. For the seller WHO they sell to might be financial only in nature or might have an emotional component also. If it's emotional and they also do not like you then that will be very tough.

The local attorney who is well versed in these things will usually have run across this many times before and have suggestions.

No legal advice given.   

Originally posted by @Romy Patel :
Originally posted by @Kris Haskins:
Originally posted by @Romy Patel:

If you have buying cash, a land trust may be an option. Nestle the LLC under the land trust as one of the trust beneficiaries. The trust is cloak and keeps your anonymity. When obtaining a loan, the bank will want an LLC or individual on the note, so may be difficult.

Great Idea, we buy in Land Trusts all the time and to me, that's the only way to buy.  You can simply make the trust the street name and/or any name you like.  The seller will have no clue and has no right to no whom the beneficiaries are to the trust.  You can frankly hire a friend/colleague to be your trustee.  Seems like a simple deal.  Think about Walt Disney submitting a contract on anything-anywhere....  would immediately raise the price.  Trusts are the best way to go, good luck...

 Have you had success in obtaining loans/bank financing when purchasing via Land Trust ? 

sorry Romy, I"m not on this site as much as I need.  YES, buying house in land trusts are the same as buying them OUT of a trust.  It makes no difference because the lender is going to make sure you sign your life away on the note either way.  The lender just wants to make sure you're on the hook PERSONALLY for the debt.  They shouldn't care about the titling of the house, which is in your trust.  Just make sure you're the beneficiary and it should be all good.  You may have to sit down with the lender and explain how it's going to work,  I did at 1st....  good luck...

@Mike Hurney

Could you not use a Bare Trust and have an attorney act as the trustee?

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