REO's & Assignments

[tampasteph]

Vette Boy,

Yes, you can.

We're talking about REOs here (bank owned properties), so there is no underlying note in the picture.  No fraud being committed, no DOS violated, no bankruptcy court, none of that.

Not sure what type of transaction you are talking about, but it's not the same as the one I am.

Steph

[Dave T]

If your going to do a double closing you have to disclose to everyone involved just exactly what is going on.  Otherwise good luck finding an attorney or a title company that will do it today. 

I think this restriction applies to the simultaneous closing where your buyer's money is used to fund your closing. 

Whether accomplished on the same day or weeks apart, isn't a double closing two separate settlements each with their own funding?  Since the settlements are mutually exclusive, the first settlement is not impaired if your buyer backs out before the second settlement can take place.

Since I don't buy anything I am not prepared to hold for rental income, I don't get into these situations.  I am just trying to understand the terminology.  Is a double closing a synonym for a simultaneous closing, or are these really two different things?

[VetteBoy]

tampasteph
     I realize you're speaking of REO's, that said you still have a huge problem with the LLC. The first being the cost. Setting up the LLC is simple, and cheap for sure unless you're in CA in which case it's $800 minimum to start. The expense is in making sure there is a solid operating agreement in place.  With the LLC, unless the operating agreement specifically provides a means for you to divest yourself of membership w/o disolving the LLC, you're in it for the life of the LLC, or your own. And ONLY those who are registered members have beneficial interests.
     That's how it becomes a good protection vehicle as you cannot be removed from managing the LLC as you can in a corporation if you are sued and have a judgement levied. Again tho, that's if you have charging order protection which the majority of SMLLC's do not have. It's something that has to be spelled out specifically in the operating agreement, if not you don't have it.
     So, if you buy it in an LLC....if the bank would somehow let it be deeded to an unfunded entity and not have someone personally liable for the note, which I can't forsee happening, and you try to sell the LLC (which is an entirely different issue if it has real property with an attached mortgage in it) .....you cannot divest yourself of membership w/o disolving the LLC. So, what have you gained?
     You've just spent a ton of money to no avail, have gained nothing. Double close or simultaneous close and be done with it. The expense of the LLC and operating agreement would be severely prohibitive when you're only going to use it for 2 hours.
     If you are the manager of the LLC, and member/beneficiary you are still liable personally. You have to be at arms length to be protected by the LLC and it's benefits. If you don't have a property manager between you and the property, the benefits are zero and the cost is throwing money down the 

[tampasteph]

Vetteboy,

You are WAY overcomplicating things.

I am talking about CASH transactions here... Your statement, "So if you buy it in an LLC....if the bank would somehow let it be deeded to an unfunded entity and not have someone personally liable for the note"  doesn't make any sense.   This is a CASH transaction.  There is no note to speak of.

The bank does not give a crap if you are buying in an LLC, a land trust, or in your own name.  They just want the property sold. 

Doing a double close is more expensive, because you will have 2 sets of closing costs.

Steph

[PhillyREO]

Hey,

Any decent operating agreement specifies the ability of the manager to transfer their rights to manage the entity if they choose to.  Additionally, upon transfer, the manager(s) are divested of and held harmless from any and all liabilities resulting from, but not limited to, the actions or inactions of future owners or their respective assigns.

Each LLC operates under the same general operating agreement, which is used as a boiler plate....with specifics adjusted to each deal.

If title is taken in the entity, you just sell the management rights, as defined above, and the buyer quit claims the home out of the entity after purchase....if they desire.

It doesnt exist for any protection, only works with as-is Cash transactions, and is done to provide an added--transferrable--layer of ownership as the contract itself is not assignable....

Or you could just DC.

JD

[allnmore]

i need a little more explanation on seasoning issue with title... i have not found a bank with less than 6 months especially conventional... also hard money lenders LTV are limited to (majority 65%). How do you work around this?  Does anybody know any banks that still has no seasoning issue?...


Please advise...

[PhillyREO]

Small local banks.  They lend their own money.