Question for note experts - Posted by Glenn(okla)

Posted by Mr.Capitla on April 23, 2000 at 20:23:26:

The idea sounds great, but you have to consider your returns if you sell your note for quick cash.

Question for note experts - Posted by Glenn(okla)

Posted by Glenn(okla) on April 23, 2000 at 17:32:24:

I have a question regarding the legality of an idea I had…

I personally own a single family residence. it is a rental.
I am considering creating an LLC and “sell” this proerty to the LLC…

would it be possible to create a purchase agreement and note…selling the house to the newly created LLC which I control…then with me holding the note for which the LLC is responsible for, sell this note to a notebuyer. doing all of this simultanously…as the home currently has a NON assumable mortgage with a due on sale clause.

BTW this might not be an original idea…its very possible that i read about it somewhere…but i cant remember the source if indeed i did read it.

any ideas regarding this would be appreciated…

BTW the plans for the funds from any resulting note sales would be to lend from me to the LLC at nominal interest rates…making it possible for the LLC to have operating capital to buy more proerties…the Loan would be repaid separate from any salaries the LLC might generate

I also need a good book about LLC’s…any suggestions there?

Thanks a million:-)

Always learning
Glenn

Re: Question for note experts - Posted by Mark-NC

Posted by Mark-NC on April 23, 2000 at 22:32:49:

Mr. Capitla,
Although it sounds like a good Idea Most Note buyers are going to consider this an arms length transaction even if you are a seperate entitiy with the LLC. I have proposed this question before to a couple of them with unfavorable results. They may accept it as long as the LTV is low enough and you possibly had a national appraisal. But from what I gathered they are not to keen on this type of transaction.

Mark

Re: Question for note experts - Posted by CarolFL

Posted by CarolFL on April 23, 2000 at 22:22:23:

Highly recommend Bronchick’s materials on trusts, corps and llc’s… makes it really clear as to which is recommended for what.

Carol