I currently own a 2 unit multi family that is owner occupied. I was looking into starting an LLC and transferring title via a Quick Claim Deed. I wanted to know if someone was against this idea. I was wondering if transferring this deed will allow me to be able to obtain another loan under my name. With the loan I have now, my DTI is too high. The loan is now a conventional loan with 75% Equity.
My goal is to be able to buy another home and obtain another loan, I currently can't with high DTI.
I'm still unsure on this because of the Due on Sale clause, but I wanted to know if it was possible to do as stated above.
Changing title doesn't affect the payment obligation/DTI.
I am not opposed to the idea because I think it is good for asset protection, especially as you start to grow your portfolio. However, if it is a single-member LLC (particularly a brand-new one), the banks will look at your personal assets and liabilities as well as the LLC's.
Thank you both. Trying to find creative ideas to be able to get another loan. I appreciate the answers.
The biggest concern you'll have @Jamie Adames is the due on sale clause... a bank loans YOU money with the assumption you are a person that owns the property. If they see it now belongs to an entity, they won't be very happy. If you're looking to continue buying, the terms might not be as favorable, but you should look into commercial loans. They usually deal with more "unique" financial situations for borrowers so its a potential their criteria will be different if you are looking for financing on a decent property.
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