Multifamily investor · Boston, MA · Member since 2017 · 281 posts · 521 votes
7y
@Mina George - when you buy an LLC, just keep in mind that you "inherent" all the debt as well. I had Mark Kenney on my show "Unbelievable RE Stories" and he shared a story of buying an LLC and then finding out that the previous owner was stealing from the investors. Since then, he doesn't buy LLC but create a new one. So do your due diligence because when you buy an existing LLC you get the good and the bad.
Attorney, CPA, Broker & Author · Scottsdale, AZ · Member since 2018 · 532 posts · 488 votes
7y
@Mina George Sure. It happens all the time. I strongly suggest you get a knowledgeable lawyer to draw up the paperwork for you. Plus, there might be New York state transfer requirements where you need to notify the state of the ownership change.
Some things to be concerned about on such a transfer are:
1) Are there any lenders involved that need to consent to the transfer?
2) If there are multiple owners of the LLC, do they each have rights to purchase the LLC interests BEFORE they can be sold to a third party?
3) Are there any outstanding liabilities (taxes, contractors and such) that need to be thought about? Who pays those outstanding liabilities? The old owner or the new owner?
Those are just some of the issues.
If you're going to do this, hire a New York lawyer to get it done. It will be worth it.
Just transferred an LLC ownership this week. Basically, an amendment to the operating agreement. The LLC I transferred owned property, but no mortgage, etc.
I don't think there is a need to re-title the property.
Multifamily investor · Boston, MA · Member since 2017 · 281 posts · 521 votes
7y
@Mina George - when you buy an LLC, just keep in mind that you "inherent" all the debt as well. I had Mark Kenney on my show "Unbelievable RE Stories" and he shared a story of buying an LLC and then finding out that the previous owner was stealing from the investors. Since then, he doesn't buy LLC but create a new one. So do your due diligence because when you buy an existing LLC you get the good and the bad.
Just transferred an LLC ownership this week. Basically, an amendment to the operating agreement. The LLC I transferred owned property, but no mortgage, etc.
I don't think there is a need to re-title the property.
There is no re-titling in this scenario. ownership of the property did not change hands ( LLC remains owner), LLC shares were transferred.
Developer · Wilmington, OH · Member since 2015 · 59 posts · 14 votes
7y
Great answers!
Is there a type of search, like a "title search" does on a property, that someone can do on an LLC to give it the safe buy signal?
Also, does a seller then save county recorder & conveyance fees selling this way? Any other savings or costs vs traditional sale?