Buying the LLC containing the property you want.

[Stian Birkeland]

Hi. I am a foreigner living in Europe, but wanting to invest in multifamily in the US. I have been looking into the many advantages to buying the entity (the LLC) instead of the property itself. This would serve me in a number of ways: - Get me a legal entity to hold my asset. Shortcut to set up all systems I need to get a running start in the US. - A number of advantages with just buying the LLC. No transfer fees, defer property tax re-assesment, etc - Tax advantages when owning an LLC as a non resident. - Single member LLCs - for easier closing - single purpose, preferrably newly formed just for the purpose of selling the property. - indemnity for unknown liabilities. I see a few disadvantages. Financing may be harder to get. So I want to focus on motivated sellers and seller financing. Costly due dilligence in some cases. What do you guys think? Anybody here that has any experience in these matters? Stian

[Wayne Brooks]

Other than the obvious possible assumption of unknown liabilities....

I don’t believe we’re talking about buying an llc that is just formed for the purposes of selling the property, just before the sale.

-Extremely difficult if you need financing, buying an llc is not nearly as easy as financing a property.

- As mentioned, many states still I,pose the transfer tax when buying the llc as opposed to the property.

-More problematic, if you buy the llc that has owned the property for any number of years you intheirt the llc’s current basis in property (their purchase price less depreciation) so not only do you not get to depreciate the full value but that reduced basis is what determines Your gain when you sell the property, not the price you paid for the llc.