Is it possible to purchase a foreclosure, rehab and sell to self?

3 Replies

Hi. I’m REALLY new to real estate investment. Initially, I wanted to buy a small condo at auction, fix it up and rent it out to start out in this industry. However, my landlord let me know he is looking to sell the house I rent from him. Now, I am looking for a house to renovate for myself and have recently started an LLC (with another person) for my new endeavor. My question: can my LLC buy a property, fix it up and sell it to myself (as a private buyer) with a conventional loan? I would be using a VA loan once I completed reno. ALSO- The property I am looking at looks like it could generate about $80k profit for the LLC... would that be legal?
@Jen Starner No attorney here, but sounds like It is all legal. But you will pay income taxes on your half of the 80k profit. And only if the lender agrees to finance the amount...agrees the collateral is now worth 80k more than earlier purchase price. But if you want your profit up front and want to finance as much as possible, yes it could work. It would be illegal if you provided fake receipts for improvements, misrepresented, lied to lender,etc.
Originally posted by @Jen Starner :
Hi. I’m REALLY new to real estate investment.

Initially, I wanted to buy a small condo at auction, fix it up and rent it out to start out in this industry. However, my landlord let me know he is looking to sell the house I rent from him. Now, I am looking for a house to renovate for myself and have recently started an LLC (with another person) for my new endeavor. My question: can my LLC buy a property, fix it up and sell it to myself (as a private buyer) with a conventional loan? I would be using a VA loan once I completed reno. ALSO- The property I am looking at looks like it could generate about $80k profit for the LLC... would that be legal?

 How can you sell something to yourself? That doesn't make sense. 

Fannie Mae does not view "LLC" as a magic word, the way late night infomercials might. If you own a potato and the potato owns a carrot, that means you own a carrot. Potatoes aren't people.