Hi everyone, I've got a newbie question hopefully you can help me with. My father and I have partnered and created an LLC to begin buying and holding rental properties. My question comes around getting the property into the LLC. My mortgage guy has told me we need to buy the property in our personal name and then transfer to the LLC. As a new LLC with no credit or assets, it's nearly impossible to purchase the property directly in the LLC.
First, is this accurate? Second, should we worry about the transfer triggering the due-on-sale clause? Third, is there any other way to do this? I have to think this is fairly common. Also, I'm not sure if it varies by state but we're looking to buy very soon in NJ.
Make sure you have an attorney review your mortgage to make sure you can transfer the property. Is this a residential mortgage broker? You need to work with a broker that works with investors and financing through a LLC. You are going to need to personally sign on the loan either way so doing it through the LLC should not be an issue but if you are doing FHA financing they are not going allow you to purchase through a LLC.