Posted by Brian-TX on May 22, 2007 at 24:06:12:
Not shooting down your idea or anthing of the sort, but some things to consider off the top of my head:
You mention wanting to be a fast dealer getting X amount of deals done a year. That $300 a pop will start adding up fast if you create a new entity for every deal. 12 * $300 is $3600. Granted its a one time expense. This gets you 12 deals a year in your plan. What will tax time be like with 12 entities? Is it a separate form per LLC?
Also, what happens if you sell a home under one of you LLC entities, and that home comes back to you in 6 months? Wont you have 6 months of holding costs until you can sell under that entity again? Otherwise, you would be selling more than one home a year under the same entity, and the state might frown on you. How much will that cost in lot rent?
What happens if you get an irate owner for some reason and they report you to TDHCA? What will they think when they do some investigation and find you are “legally cicumventing” the rules? Perhaps nothing, and perhaps they have no jurisdiction over you since technically you are unlicensed, and therefore it is a consumer to consumer transaction.
I would definately bounce this off a lawyer. I would be interested in hearing what you find out as well.
Just an FYI, we have only done one deal, and we are not licensed (although I did attend the class in Austin). I have also heard it is not that difficult to get your bond location changed if needed. I do think the laws here in Texas are not very Lonnie deal friendly. This could both be a good, and bad thing if you really think about it.
If we do another deal, we will more than likely do it under another entity, or in a family members name. $1250 is quite a bit to spend yearly when you only have a couple of deals going.