Start an LLC or quit claim property later for favorable terms?

2 Replies

I'm an out of state investor about to close my first property in Omaha, NE. My lender has asked if I want to purchase the property under my name or an LLC, which will determine the loan terms. From my understanding if I purchase in my personal name, I can get a residential loan as opposed to commercial. Does anyone have advice/experience closing in their personal name and quit claiming the property into an LLC shortly after? Is it higher risk and is there any reason I wouldn't want to do this?

This is a buy and hold property and I plan on staying in it for at least 3-5 years.  


If you take personal financing and the deed personally, you will get a lower interest rate, but the loan will show up on your personal credit report. You also open yourself up to personal liability issues in the event of a lawsuit. When you try to Quitclaim the deed into your LLC, you will breach the mortgage clause referencing Due On Sale and the lender then has a right to call the loan due and payable in full. Also, the quitclaim deed may void the title insurance policy that you got at closing. Furthermore, unless you set up the property insurance correctly, you could end up without coverage in the event of a claim if the property is deeded in the LLC and insured personally.

Happy Investing

Derek Dombeck

@Tom Donnelly , call access bank in Omaha.  I just talked to a loan officer there and they have no problem with you getting the loan in your name and then quit claiming it down the road.  

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

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here