Husband and wife investors, whose name to put on deed?

Question

Hello,

My wife and I are buying our 3rd and 4th "doors" (same property with a single family and an apartment). Owner financing.  Are there advantages (for acquiring bank loans in the future) to getting the loan/deed in either one of our names versus getting the loan/deed put into our names jointly?

Thank you.

Steve Vaughan · Answer

With owner financing I go with both our names, but we have long terms so refinancing in a short time is not an issue.  If you have a balloon coming due in say 3 to 5 yrs, I would go with her name.  Easier to qualify for a refi than purchase.  May get a freebie for you if there's enough equity and her fico is good.   Worse case scenario she will have to quitclaim to you later.  Set up a community property agreement if you aren't in a community property state.

I established a mgt co (s-corp) a long time ago that all of our rents go into.  My wife is a 45% shareholder in that. Helps her qualify with 'business income'.  Either one of us can get a loan, yet neither of us have a good w-2.

You are smart to consider not burdening both of your credit unnecessarily!  I know it's by default for you, but many don't realize they shouldn't both be on loans if they don't need to be. Then they run out of easy loans and say- hey, we should've done it differently. We could've had 20!

Kerry Baird · Answer

Each of you, if you qualify, can get 10 "easy" conventional mortgages in your own name.

Jerry W. · Answer

@Randy Fauske, if you can get the property in your spouses name for the loan great.  Without a job she might not qualify for regular mortgages through Fannie or Freddie.  If she cannot qualify it doesn't matter how you take title, she cannot get any loans.  Only qualified bank loans count for the 10 limit.  I heard they moved the number of loans down to 4 but don't know for sure.  Your not being on the loan may help your debt to income ratio.  @Steve Vaughan above gave you really good advice to get an agreement on ownership just in case something goes wrong.  you might give him a vote.

Jason Dillard · Answer

I  wouldn't be concerned on how I was going to refinance as compared to asset protection.  I wouldn't ever own anything in my name if I could help it.  If you plan on getting big then you'll have to go to the commercial side of the bank eventually anyway.

And on another note, why would you ever pay off a seller-financed note unless you can take your lender with you into another transaction?  Every private loan I get, in the back of my mind, is a line of credit to buy the next deal.

Randy Fauske · Answer

Thank you all very much! Later this will prove to have been a valuable conversation I'm sure!

Thank you again.

Randy Fauske · Answer

OK, my spouse has no W2 job. So if I understand this correctly and the owner will allow us to finance in her name it'll be easier for me to get my 10 'easy' bank loans later without this one counting against me. Yes?

Thank you again!

Husband and wife investors, whose name to put on deed?

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