Purchasing to fix and flip, whose name goes in the contract?

3 Replies

I'm partnering with an investor, I'll do all the work, she is going to only put the money for it, since the money is hers, should the title of the house be on her name?

Ruben

Dallas TX

2nd Deal

Hey Ruben,

Placing the property under your personal name is dangerous because you become personally liable for the property. I always put the property under an LLC so that we are covered by the corporate veil and only the LLC is liable. If your personal name is on contract, your personal assets become vulnerable.

You should be on title for the property, however I would make sure you use an LLC to protect yourself. Your investor may want to have a Deed of Trust / or Lien on the property

Thank you so much Etienne! Would a lien/deed establish this "the property is under my name but the investment is the investors" this in the legal way of describing it?

If you are truly partnering with the investor ... in other words, the investor is not just lending funds at a specific return but in fact sharing profits (or losses) on the deal ... then the best way to protect both of you is to form some sort of entity and take title in the name of that entity. In the governing docs, require both signatures in order to convey the property at settlement.

The most common way to accomplish all of the above is with a member-managed LLC.

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