Buying a property owned by an LLC
We had a wholesaler selling a property currently owned by an LLC he created just for this property. The idea is that at the closing he is transferring the LLC to us, thus the property owned by the LLC. Does anyone have experience in such a transaction? What exactly does "transferring the LLC" mean and entail? And exactly what type of documents is required to make the transfer of LLC ownership happen? Thanks in advance for your advice.
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Welcome to BP.
While not common, this type of transaction can be done successfully. You will want to talk to an attorney to make sure the seller didn't encumber the LLC with any undisclosed debts or other liabilities. All being equal, it's usually better to just by the asset and not buy any baggage the seller may have put into the LLC. There are exceptions, but be careful. When you become the sole member of his LLC, and he steps aside, you are responsible for past LLC actions.
As for the method of transfer, it's relatively easy. You are installed as a member of the LLC by buying out the incumbent member(s) interest. I've not bought an LLC, but my company has done a merger of LLCs where my company was the surviving company.