I recently put a property under contract in an LLC in Massachusetts, I did so to get around the seasoning issues in the contract, My understanding was I could put a property in an LLC and sell the LLC thereby getting around the 90 day seasoning.
What is happening now is I am running out of time to get the title work done but every RE attorney I have spoken to (5) have no clue of the implications, have no experience with back to back closings that involve an LLC , or simply do not want to get involved.
Can anyone here give me a little direction? Or better yet anyone have a title agent or RE attorney in Ma that may have the experience I need to get this done?
Any help would be greatly appreciated.
I am not a lawyer, and I don’t play one on tv.
The LLC closes on the property with valid title. The LLC now owns the property. stop.
A membership interest in an LLC is personal property (at least in TX) and therefore the sale of the LLC does not go through a traditional “closing.” No title company need be involved. The LLC will still own the property irrespective of who owns the LLC. Selling the LLC is just a contract and bill of sale. There will be some additional IRS paperwork for the sale of the business, but as far as I know, none of this would affect the property owned by the LLC.
When the new owner of the LLC wants to sell the property, or bust it out of the LLC in some way, at that point new title insurance and related work may be necessary. But I don’t think a “double closing” would be required at this time.
I am not a lawyer and my advice is not legal advice.
Thanks mcwagner, that is my understanding as well, however it has become increasingly difficult to find an attorney that sees it this way, they are all concerned about other issues.
My response is always “what other issues” There are no other issues until you create them!
irregardless, I am losing hope that I will be able to find a buyer that understands this and harder still finding a buyer that has an attorney that understands this, which will severely reduce my pool of buyers.
This property is such a great deal I’m shocked it has been an issue at all.
thanks for your input.
It is a case of the sheep leading the lambs.
Sure an LLC can hold title to a property and that gives you a) asset protection, b) a way to flip a property.
Note: You do not sell an LLC - you transfer your membership - or better still you contract with a party for them to be admitted as a NEW member and for you to resign. This gives scope for a lot of tax advantages for you.
Personally I prefer to use INC.s as they are more effective for tax planning. By using Trade Credits I never have to pay tax on any flip deals or longer term property holdings. (A lot harder to achieve the same with an LLC)