BiggerPockets

Looking to place an offer on 1st property. A 4plex. My question is related to residential financing and an LLC.

We qualify for a good 30 yr residential loan under our own name. Our intention was to purchase the property under our names and immediately transfer the deed into the LLC's name.

What I have heard from an attorney is doing the purchase this way opens us up to more personal liability.. Because the financing is coming from us personally and not through the LLC this is a crack in the veil of the corporation.

We are finding it much harder to find commercial financing since this is our first property and we do not have a track record of success.

We both have excellent credit and a good amount of cash on hand. We would like to leverage somewhat though to allow more purchasing opportunities while prices and lending rates are low.

Can anyone chime in on the risk vs reward of using the residential loan but transferring the property into an LLC?

The lender already stated that transferring to the LLC with a quit-claim deed is not an issue for them.

They did say that doing a refi would be impossible. But given that rates are under 4.3% I don't see that as a big deal.

But they are the ones who advised consulting with a lawyer regarding the liability ramifications of doing so.

We have no problem backing up the loan personally, but want to loan to be in the LLC's name if possible.

From what I have found you can't really get a mortage structured like that. You would need a standard business loan under the LLC.

If we are missing something please chime in.

Guess we are hoping for the best of both worlds (convenience and rates of a residential loan and security of having the property in the LLC's name). Maybe what we want does not exist.

I have 2 quadplexes, i just deeded them to my corporation. no issues. I also have the umbrella policy, just in case.

@Keith J. glad you made a solid connection. Yes, as you saw, there were many at the meeting that said it was possible and actually not overly difficult.

Just have to make the right inroads to find what you need sometime. Information and connections are solid tools in this business, as with many others.