Buying shares from an LLC, is this fishy?

Member since 2020 · 8 posts · 1 vote

I'm looking to buy shares of an LLC. The LLC is owned by a trust and a couple of investors. The trust is looking to sell 1 share to me. The owner of the trust says he'll personally guarantee my money back within 6 months if no cash flow from biz. He wants to give guarantee with a notarized memo. But he says he can't put that guarantee in the purchase agreement because the other investors wouldn't agree to it. Can he guarantee my money with the memo? does this sound fishy?

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Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
3y
Quote from @Rod Saleh:

I'm looking to buy shares of an LLC. The LLC is owned by a trust and a couple of investors. The trust is looking to sell 1 share to me. The owner of the trust says he'll personally guarantee my money back within 6 months if no cash flow from biz. He wants to give guarantee with a notarized memo. But he says he can't put that guarantee in the purchase agreement because the other investors wouldn't agree to it. Can he guarantee my money with the memo? does this sound fishy?
It's not something I would do. PM me if you want to know details.
Seems to me that using that money for you to have 100% ownership, using creative finance, makes a lot more sense.
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Mason WeissBusiness Member
Realtor · Phoenix, AZ · Member since 2021 · 523 posts · 239 votes
3y
Sounds fishy, not sure your relationship with these individuals but I would have an attorney look over it before you proceed.
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Bill B.
Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
3y
You have less than 1/2 ownership and you get your money back if they don’t give you $1 in cash flow? Wow, what could go wrong? Send me money and I will send you $1/yr as well.
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Chris SeveneyBusiness Member
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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
3y
Quote from @Rod Saleh:

I'm looking to buy shares of an LLC. The LLC is owned by a trust and a couple of investors. The trust is looking to sell 1 share to me. The owner of the trust says he'll personally guarantee my money back within 6 months if no cash flow from biz. He wants to give guarantee with a notarized memo. But he says he can't put that guarantee in the purchase agreement because the other investors wouldn't agree to it. Can he guarantee my money with the memo? does this sound fishy?

first a LLC typcially does not have shares. The way this is written is super sketchy. Not something I would consider.
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Eric Gerakos
Investor · Costa Mesa, CA · Member since 2016 · 1k+ posts · 1k+ votes
3y
Don't walk away from this opportunity. RUN..........
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Steve K.
Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes
3y
Yeah this sounds as fishy as Friday during Lent.
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