I am closing on a multi family property here soon. I am along ways into the loan process already and don't want to mess anything up or slow the process down, as we need to close ASAP. It will be purchased under my LLC with me as the guarantor on the loan. With that said, I have a partner who is coming now for a percentage of ownership in the property. He will be support the rehab expenses. Since I am so far along in the loan process... Is it possible to add him to the title after we close and not the loan? Will the bank care since we are not transferring title but only adding someone? Any thoughts on the topic or ways to handle this would be very helpful!
All the best!
Normally you can do a Quit Claim deed and add the partner to the title. This can cause some issues in a couple of places:
1) For the partner, if things go south, they are not as protected down the line, but if they trust you have clear title, then that should not be a problem.
2) The mortgage company can have issues with it, but since the QC is not transfer of responsability to pay, just the transfer of personal ownership, it is often not called by the lender. (However, This does leave you as the person with the mortgage as the only person liable in the even that the mortgage gets paid.)
Hope that helps!
If the LLC will be the property owner, you would sell your partner a % of the LLC (sale of membership interest). This assumes it is a single asset/purpose LLC.
There would be no reason to change title.
Thanks Tom & Patrick! Do either of you see any issues with putting the money in the business account prior to closing or would it maybe be better to wait till after we close?