​Buying a property via “LLC assignment”

[Yinan Q.]

A deal was presented to me and my partner by a wholesaler. A LLC was created just for this deal and he will assign the LLC to us. We will become 50:50 owner of the LLC that controls the property. He has done this many times before with other buyers and I have no reason to doubt him or this approach.

What I am trying to figure out is what it means to me and my partner when we sell the property. Our goal is to fix and flip it. Do we sell the LLC to the end buyer? Or can we just sell the property? I think an ordinary buyer will not like the idea of purchasing a LLC.

[Account Closed]

One benefit to this type of deal is that there should be no transfer tax on your purchase (if your locality charges transfer tax) because the property is not being sold (changing ownership)- the entity is being sold. The negative is that if someone requires financing for this deal, it might be tougher to get a loan for an LLC owned property. If it's a flip, you probably have cash, or private/hard money, so that is not an issue.

On the back end, the next owner will simply buy it, into his own name, from the LLC.