Buying property LLC question?

6 Replies

I have read it is very difficult to finance a home with an LLC. How do I overcome that? Do I buy under my name, form the LLC, and then transfer it over to the LLC? Is it easier to go with an umbrella policy instead? ~Josh

Josh, my wife and I buy properties in our name, then transfer into the LLC two or three weeks later. Our attorney does it for about $180 per property.

We have each property covered by insurance, plus have a $1 million umbrella policy as well.

@Brooks Rembert. What exactly does it accomplish by moving the property into an LLC?

I purchased my 4 unit apartment with my "LLC" and signed/guaranteed the note personally also.

Currently the only business that "LLC" does is with regards to that 4 unit apartment.

I figure as my assets and exposure grow I will be more inclined to purchase an umbrella policy.

@Brooks Rembert  

Has it paid off so far having both the LLC and the umbrella policy both? I have yet to look into it as of yet with costs but from what I understood the policy itself usually is not that expensive monthly.

@Josh B.  Luckily, it hasn't paid off. :)  we've yet to have any serious issues this far. 

Our umbrella policy is $275 per year through USAA. 

Some commercial or portfolio lenders will allow you to finance in the name of your LLC if you are personally guaranteeing the loan or your LLC has built up good credit & reserves.

Otherwise you can finance in your own name and then transfer title to your LLC after purchase. But if you do want to refinance that way you'll have to put the property back in your name for the refinance and then transfer it back to the LLC again after. I have heard there is a small chance that transferring title can cause the loan to be called due.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Join the Largest Real Estate Investing Community

Basic membership is free, forever.