Forming then Assigning an LLC

[dgrazer]

What is the name of your state (only U.S. law)?

Pennsylvania---What is the procedure and costs for forming an LLC to purchase real estate? For example, if I was buying an REO and I wanted to sign the purchase agreement "123 Any Street LLC" how would I go about doing that? Also, if I wanted to assign my contract to another buyer prior to closing, what documents would be required to assign/sell the LLC?

[FlyingRon]

Form an LLC? Fill up the certificate of organization and take it and $125 to the department of state and then wait about a month.

You can have contracts made out to the LLC as a party, but you sign your name as a member of the LLC authorized to make that contract.

You can transfer membership in the LLC by selling the shares to the new party.

The questions that need to be asked is: how are you intending to get this property financed? You think that banks are going to be falling over themselves to fund your newly formed LLC? Do you think property sellers are desperate enough to contract with an LLC that can't fund things and is merely trying to flip a contract?

[dgrazer]

In response to both of your questions: How do I plan on funding the deal? I have three Hard Money Lenders lined up and a couple of Private investors. As far as the banks or sellers opinions on what I intend to do with the property, I wouldn't know. I'm not sure what they would think about me assigning the contract. However, I could only assume that because they are listing a property for sale, then all they would be concerned with is successfully closing so they can accomplish their goal of selling the property. In other words, as long as my assignees deliver at closing, everyone wins. I may be wrong with my assumption. What are your opinions on that?

[FlyingRon]

You are not ASSIGNING the contract. That's probably prohibited by the contract. The entity being a party to the contract is the LLC and the shares of the LLC are what's being assigned.

Sellers have every right to be skeptical about shams such as this as it could leave waste a lot of time and money to them when it doesn't close. Just because you bring a full price offer, they don't have to accept it if they don't like the smell of it. I sure as hell would have to be REAL desperate to take a bid from something like this.