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Updated over 8 years ago on . Most recent reply

User Stats

44
Posts
2
Votes
Jonah Hillman
  • Investor
  • San Diego, CA
2
Votes |
44
Posts

Is this a good selling strategy?

Jonah Hillman
  • Investor
  • San Diego, CA
Posted

I'm selling a turn-key property package with great cashflow.

Here's my question:

I live in California but put title of ownership to all 5-properties under a local (Michigan) LLC which i established when i bought the properties. I'm the sole member of the LLC and it has no debt and no other assets besides the rental property package for sale.

To sweeten the deal, I'm considering offering the buyer not only clear title to each property, but also the LLC itself, if they want it. I won't need the LLC anymore, and it seems to me the LLC would offer the buyer the following benefits:

- Seemless transfer from the standpoint of the tenants. They’re used to making monthly rent payments to my LLC name and so would continue to make payments to the same entity, as usual, despite the LLC having changed hands.

- Saves buyer hundreds of dollars and several weeks in setting up their own local LLC. The buyer would (or certainly should) likely set up their own LLC anyway, so i'd save them the time and money.

- Aids in title seasoning since my LLC (soon to be buyers LLC) has owned and held title to the properties for a year. So they could re-fi out immediately upon buying the properties and get their cash back.

- Reduced transfer fees since the corp could be transferred in possession of all properties, instead of 5 individual transfers. 

Am I missing something? Are there any reason i should NOT do this? Are there other benefits I may have over-looked? Thanks very much for any input you can offer!

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