Will deal be slowed if I change LLCs?

[Maryann L.]

We have a deal on the table. The BPO came out two weeks ago and we are awaiting if they will accept our offer. We'd like to change the LLC that we are purchasing the deal with because we closed a few properties with it already and need to switch.

We want to write a letter to the lender just explaining the situation and why we are switching LLC's. The same deal will be on the table and literally it's a matter of switching the p&s and sending a new one. Will this hold things up for the homeowner? Has anyone done this? What were the ramifications?

Is there a better way to do this than what we are thinking? We'd prefer not to slow the process, but really need to switch the LLC.

Thanks.

[Will Barnard]

It is best if you show (prove) to the bank that the entity owner of record on the PSA is the same owner of record as the potential substituted entity.

And ditto what Scott stated, doing so now is better than later.

More food for thought. Are you buying and holding? If so, there is very little risk in simply keeping it as is and then having the purchasing entity transfer ownership to the new entity. Also, it is perfectly fine to hold multiple properties in one entity. Those that state you have to have just one or two properties in an entity are wrong in my opinion. It is not the quantity of properties that is an issue, but the amount of equity in them that you put at risk. Spreading equity over multiple entities is appropriate.