How are people LEGALLY getting around MLS deals like bank foreclosures that have a “no assignment” clause in the standard state purchase contract and assigning these deals to end-buyers?
They either do a double close or form LLC’s and flip those LLC’s to end buyers.
Yes, I heard of this. I have never purchased an investment property - goal is to do so by Dec. 31 2009. HOWEVER, I did get a property under contract about 3 years go were the lady was selling for what she owed and the ARV was about 4 times as much. I had a “mentor” who provided the contract and I went out and got her to sign it. Long story short, when it came to moving out day, she “changed her mind” and my mentor (term loosely used) was not helpful/didn’t even try to enforce contract. I was a total novice, so I had no idea what to do and was not going to fork over any of MY money to put a lis pendens or get attorney advice beyond the free initial consult to try to hold onto this deal because I wasn’t sure of WHAT TO DO.
Going through the tax records several months after the property was rehabbed and obviously sold, I saw the new owner bought from an LLC.
Though I cannot prove it, I suspect my “mentor” stole the deal out from me and formed the LLC to sell it. Since the potential wholesale profit was about $50K, I can see why he’d get greedy and want to keep my $25K for himself.
SO – that makes me very leery of forming an LLC because I guess in the back of my mind –still being a novice (and who isn’t until the first deal is done) – I’m scared to getting the property under contract under an LLC that I’ve formed and then my end buyer doesn’t show up at the table to buy my interest in the LLC. I’m sure there will eventually be some properties that I do NOT want to keep for rental purposes and want to essentially get rid of and sell off – if that end buyer doesn’t show. . . yikes!
Has anyone had THAT happen to them? How can a newbie like me smoke out the end-buyers/investors out there that are shifty?