Wholesaling to Myself Question

[Keith W.]

A seasoned real estate investor mentioned this strategy he has used from time to time but didn't go into detail on how it works. Basically, he wholesaled a property from his homebuying LLC to his home development LLC. I'm trying to figure out the benefit of this and came up with a theory. I wanted to put it out there to see if it makes sense, doable, and legal. My overall objective is to purchase the property with a min $1000 out of pocket. Not including closing costs.

Let's say my homebuying LLC puts a property under contract to buy for $100K

I want to wholesale that contract to my home development LLC for $125K

My home development LLC approaches my HML for a loan of $100K as I know they will require a 20% downpayment which equals $25,000

In essence, that $25k is going to me so it's a wash and the seller will receive the $100,000 asking price. 

• Does this make sense?
• Would the closing attorney or lender take issue with me essentially selling to myself, therefore no real money exchange?
• Is it all legal?