LLC for Wholesale Double Close

[Robert Hamilton]

I am fairly new to wholesaling. I would like to use an LLC as the purchaser, then assign my interest to the end buyer at the closing. My question is would I set up the LLC first having it on standby?

[Will Barnard]

Quote from @Scott Johnson:

Quote from @Robert Hamilton:

I am fairly new to wholesaling. I would like to use an LLC as the purchaser, then assign my interest to the end buyer at the closing. My question is would I set up the LLC first having it on standby?

 @Duncan Hayes and @Jesse LeBlanc covered the LLC issue well. I just want to make sure you understand the difference between a double close and an assignment since your title says double close and you say you want to assign it.

• Double close: You purchase the property and sell it immediately after, normally on the same day
• Assignment: You use an "Assignment of Contract" agreement to assign your interest

If the seller wants to use their contract and it doesn't allow assignment, double close is your only option. That's just weird, though, so make sure you're sure of your numbers. Also, make sure you're not trying to wholesale a property that that "seller" is wholesaling...

There appears to be a convoluted transaction here that was not spelled out originally. First, double closing is NOT the only way to get around a no assignment clause so that statement is incorrect.
Next, it appears this contract is already with a wholesaler and now you want to wholesale it. Having multiple middle men is a convoluted deal which would likely eat up any spread for the actual investor buyer. Too many people try to do these daisy chain deals and rarely are they successful, more often, they piss the seller off when you don’t close.

Wholesaling - having the buyer in place first with their criteria is the best business practice for these types of deals as you have way more options to structure it legally and much more confidence negotiating the deal and making the offer when you have this puzzle piece in place. I won’t get into all the legalities of wholesaling as that has been discussed at nauseam on BP - but many transactions completed violate the law so make sure you are not one of them. You do not need an entity to wholesale, however, if you do not double close, then you likely need an entity or trust to keep the transaction (structure of it) legal. By using an entity or trust and naming your buyer as part of that entity or trust, you don’t need to double close or assign as your buyer and you ARE the buyers. You simply sell your interest in the entity to the buyer (or assign beneficial interest of the trust) for your fee. All legal, no lying to sellers, no need to publicly advertise a property you do not own (not legal in most states without a real estate license as you are brokering without a license when you do that), etc.