I just created an LLC and will transfer my current properties into them on the next refinance. I bought these properties in my own name.

How would I do this in the future with new purchases via BRRRR? Would I buy them directly into the LLC or should I buy personal then transfer them later on the refinance? Does it matter?

Reason I ask if I have some personal credit cards with a 5% interest rate that I like to use for renovations. If I buy directly in to the LLC, then does this limit me to only using business credit cards?

Hi @Chris Ayers ,

Are you refinancing your current properties into a commercial loan? You will not be able to get a conventional mortgage if the title is held by an LLC.

For future BRRRRs, you really have two options:

1. Purchase the property in your name, renovate, and refinance into a conventional mortgage. You can then transfer the title from you to your LLC. The only issue with this is the bank can potentially call the loan due at this time (or any time thereafter), since there is a Due on Sale clause in the contact which prevents transferring the title without paying the loan balanace.
2. Purchase the property in the LLC and roll it into a single commercial loan or a portfolio loan with your other properties. This will have worse terms than the conventional mortgage, but the bank will not have the ability to call the loan due. However, it is nice to have just one loan and one payment on all your properties.

Hope this helps!

@Matt Souza   Yes refinancing them into commercial. 

Does it matter though if you buy in personal name, do all your renos, then transfer to LLC at the refi?

In Michigan, that is not an issue, but I cannot speak to VA. Here, we just Quit Claim Deed the title from our own name to the LLC. There is some paperwork and a small filing fee you need to pay the county, that's it.

From what I can understand, if you utilize the "Quit-Claim Deed", that renders any title insurance null & void should a problem come up with the title at a later date.

@Matt Souza I invest in NC, but I normally refinance within 6-12 months so I do it then. 

Originally posted by @Clint Galliano :

From what I can understand, if you utilize the "Quit-Claim Deed", that renders any title insurance null & void should a problem come up with the title at a later date.

Should that be a problem, if you bought it with a clear Warranty Deed to begin with? 

[But, could/would be a problem if you (originally) bought it via Quit Claim, right?]

In other words, in this scenario, a (subsequent) Quit Claim Deed will not have any way of clouding the Title, right? [Unless you are the one trying to pull the wool over someone's eyes!]

Or, did I miss something?

@Brent Coombs The title is deemed insurable and the title insurance is to protect against claims that the title is not clear. Things like property line location, someone claiming ownership that is not documented in the title, etc. So, if you buy title insurance and someone makes a claim against your title, then you insurance is potentially null & void after a quit-claim deed transfer.

I am not an expert, but this is my understanding of the matter. 

Ultimately, if you are using the LLC structure for asset protection, you would want to have your property owned by the LLC entity. Commercial loans have shorter terms and higher interest rates, but if you take that into account in your analysis, and still cash flow at an acceptable amount, then you are doing OK.

Your attorney and CPA will give you the best advice as to how to proceed.