There’s a growing trend in the world of US real estate that seems unlikely to stop anytime soon – more and more properties are being owned by legal entities, or Limited Liability Companies (LLCs). For anyone involved in the real estate industry, this is a big problem because it’s becoming increasingly unclear who actually owns what.
Knowing who the real owners are is the foundation in which the real estate industry is built, and OpenCorporate’s data is helping to reshape how professionals approach this challenge. Especially now, in light of new trends discussed below, data transparency in real estate ownership is more important than ever before.
The problem with LLC ownership
LLC ownership is increasingly common, but there is no clear way of accurately identifying the true stakeholders behind these entities. While pinpointing the LLC might be straightforward, unearthing the actual contacts behind these entities is far more complex. It’s a significant challenge, with very few companies working to solve it.
This is where OpenCorporate’s data becomes a powerful tool, as it helps unveil the hidden layers of LLC ownership, making it easier to see who’s really behind these LLC companies.
Finding out who is behind LLC-owned real estate is a key ingredient in making better business decisions within the real estate industry.
Real estate trends in 2023 connected to LLC ownership
A recent article by Dealpath highlighted trends to watch out for over the coming year, many of which are directly impacted by the rise in LLC ownership.
- Wholesaling as a growing strategy: Investors are increasingly adopting “wholesaling” – a method focused on identifying and acquiring undervalued properties at scale. In wholesaling, investors often encounter properties owned by LLCs. Our data cuts through the complexity by revealing the real owners behind these LLCs. This clarity is crucial for wholesalers who need to negotiate deals or understand the property’s background.
- Institutionalising single family home rentals: With rising interest rates making homeownership more challenging, institutions are increasingly investing in single-family homes, often through LLCs. Understanding these entities is vital, and OpenCorporates’ data sheds light on these institutional owners, making it easier for other market players to identify potential large-scale partners or competitors.
- Commercial real estate’s ‘pencils-down’ mode: With high capital costs and inflation, the commercial real estate industry is in a ‘pencils down’ mode, with many investors waiting for more favourable conditions. LLC ownership can hide which firms are active or pausing investments. Our data helps shine a light on the real players behind LLC-owned properties, boosting strategic decision-making during uncertain times.
- Proptech advancements: As the real estate industry increasingly embraces technology, OpenCorporates’ data can play a vital role in powering these solutions. From deal management software to Proptech startups, our data can help these technologies succeed. By providing clear ownership information, we provide Proptech solutions with better analytics and a more informed path for development.
- The importance of ESG in investment decisions: Environmental, social, and governance (ESG) considerations are becoming crucial in real estate investment decisions. Our data helps firms in aligning their investment strategies with these standards, ensuring compliance and strategic advantage.
- Adapting to macro economic changes: As economic conditions shift, the agility to adapt is key. The opaque nature of LLC ownership can be a barrier, but our data provides the insights needed to swiftly adapt strategies in line with changing market dynamics.
Use cases for OpenCorporate’s legal entity data
Our data is useful for anyone working within the real estate industry, either directly or indirectly, but some of the most common needs in light of these trends are highlighted below:
- Multiple listing service (MLS) data providers: By integrating our data, they offer richer, more detailed listings. This includes insights into LLC-owned properties, giving users a clearer picture of the market.
- Commercial real estate companies: They benefit from our data for thorough due diligence. Understanding LLC ownership helps in assessing risks and opportunities, leading to more informed investment decisions.
- Real estate formation companies: These entities gain insights into the competitive landscape, including the strategies and structures of LLC-owned competitors, which can guide their own business strategies.
- Proptechs: Our data is invaluable for application developers working on real estate technologies. It empowers their platforms with accurate ownership information, enhancing their offerings and making them more attractive to users.
- Skip tracing companies: The comprehensive ownership data we provide streamlines their processes. Whether it’s for debt collection or legal purposes, understanding LLC ownership quickly is crucial, and our data makes this possible.
- Real estate marketers and agents: They use our data to identify potential clients and understand the players in their market, especially those hidden behind LLCs. This knowledge enables targeted, effective marketing strategies.
- Investors and analysts: They rely on our data for market analysis and investment decisions. The transparency into LLC ownership helps in evaluating the stability and potential of investments.
Conclusion
Organised and dependable Legal-Entity data is a crucial tool for navigating the complex world of US real estate. As the market changes and new challenges arise, we’re committed to providing the clarity and insight needed for our clients to succeed. We understand the importance of clear and accessible information in real estate, and we’re here to help demystify LLC ownership.
OpenCorporates is making it easier for real estate professionals to understand who owns what, especially when it’s hidden behind LLCs. This allows for smarter decision making and is the key to staying ahead in a market that’s always evolving.
