Katy, TX · Member since 2017 · 372 posts · 140 votes
Hello BP, really hope you can help with this one!
It occurred to me in my last transaction most people are more interested in making their top line number work . And if you get creative with how you make it happen it doesn’t matter, so long as they keep hearing the top line number.
What if I wasn’t interested in the SFR in your LLCs portfolio only the Multifamily? If you were ready to move away or retire and we’ve become best buds, you want me to take everything! You’re done! Could I buy the LLC, keep everything set up “as-is” just change the agreement to my name and my partner’s? That way I can give you X amount for a piece of paper instead of telling you I’ll give you X amount for property A property B property C D E F G... just feel it sounds more agreeable?
Anyone done this? Successfully?
Investor · Bayside, NY · Member since 2017 · 1k+ posts · 1k+ votes
8y
I have bought and sold businesses, and lawyers advised, never buy the entity, only buy the assets.
If you buy the entity, you have no idea what the liabilities are, and any future liability from the past. There are statutes of limitation, so if someone sold you the entity, and the entity goes back some years, someone can sue for something that occurred some time before your acquisition.
Lucky for me, I bought a business from an S Corp through an LLC I formed, and the S Corp and their owners had an ongoing $3 million lawsuit against them. Had I bought the S Corp, I also bought the $3 million liability.
Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
8y
Haven't done this, but in theory the LLC could be sold as a whole, but generally if you would otherwise be cherry-picking your price for picking up assets that you don't want would be too low for the seller.
Investor · Bayside, NY · Member since 2017 · 1k+ posts · 1k+ votes
8y
I have bought and sold businesses, and lawyers advised, never buy the entity, only buy the assets.
If you buy the entity, you have no idea what the liabilities are, and any future liability from the past. There are statutes of limitation, so if someone sold you the entity, and the entity goes back some years, someone can sue for something that occurred some time before your acquisition.
Lucky for me, I bought a business from an S Corp through an LLC I formed, and the S Corp and their owners had an ongoing $3 million lawsuit against them. Had I bought the S Corp, I also bought the $3 million liability.
Real Estate Broker · Northeast PA · Member since 2017 · 2k+ posts · 2k+ votes
8y
We recently acquired another property management company (LLC) but did exactly as @Frank Chin said. We only paid for the existing contracts with owners, NOT buying the LLC for the same reasons as stated.
Also, if you are buying only one property that is held by LLC, I suggest you do title search on the property AND proper search on LLC so nothing can attach to the property, and make sure your title insurance covers. That is one reason we don't us LLC to hold multiple properties--one strike against the LLC and they ALL can be 'out'.