what is the process to take over a LLC of a multi portfolio

Question

is there any one with experience.

i came across a great deal in upstate ny

multi unit rentall portfolio

owner is ready to sell the LLC (saving transfer tax)

is anyone experience how it he's to go as far as the closing. loan. etc ?

Edward Liu · Answer

I just completed an deal (I am the seller) using LLC transfer.  I would suggest to create new LLC to do transfer rather than take over existing LLC.  Existing LLC could have liabilities that are not obvious.  Don't take seller word for it.   Local title company should be able to set up the transfer.

Oleg Shalumov · Answer

@Sol Silverstein I know when you purchase a property, you can deduct a depreciation over time ...  can you do the same if you purchase someone’s LLC? What if the LLC already took out the depreciation on  the property? will you, the new owner of LLC, have to pay the taxes when you sell the property ( even if you do not use depreciation)?

Sol Silverstein · Answer

@Edward Liu @Danny Randazzo Thank you.

if i am taking over the LLC the bank will consider it a purchase or a cash out  ?

meaning i will get a loan based on my purchase price 75%LTC. or based on what its wort  70%LTV ?

Danny Randazzo · Answer

@Edward Liu makes a very important point about existing or old liabilities that the LLC might have which would become yours too if you purchase the LLC. You need to find a good local real estate attorney to help review the LLC and make the purchase/transfer as smooth as possible. good luck.

Edward Liu · Answer

I highly caution against taking over existing LLC and run on title does not mean the LLC don't have other liabilities.  Maybe LLC has a lawsuit for a building it once owned or a loan that is not reported on tax returns.  Lawsuit will not sue the seller, it sues the LLC.

If LLC, you need to get commercial loans.  Commercial loan won't lock in rate for 30 years, usually 5 to 7 years.  Should not have affect on closing other than the method and usually lower cost.  Title company should tell you cost.

Sol Silverstein · Answer

if they do have great tax returns -on the llc ?

Eli Lederman · Answer

You would need to show strong tax returns for consideration.

Past rental history has no relevance.

Sol Silverstein · Answer

even with a great cash flow/rental history.?

Eli Lederman · Answer

A clean LLC has nothing to do with clean title on property.

It isnt easy to get a loan on a portfolio upsate

Sol Silverstein · Answer

@Edward Liu @Eli Lederman of course will run title.

i just want to know the process

& the pros-cons as far as loans. closing. ETC

what is the process to take over a LLC of a multi portfolio

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