Trying to BRRR...
I am purchasing a distressed home with cash from a private investor. I can purchase it under my personal name or through my LLC. My goal is to get the home (after the reno and refinance) under a 30-year fixed mortgage UNDER my LLC. How do I go about doing this?
I want to get the asset protection of the LLC but LLC's only allow commercial loans that refinance every 5 years. If I purchase the home under my personal name I can get that 30-year fixed rate but the asset is not protected and anything else under the personal name is at risk. Also, if I purchase it under my personal name and transfer it to an LLC, that will incur transfer tax and may trigger the due on sale clause.
How have other BRRR investors do this (if possible)? Any input would be appreciated.
Not all loans have due on sale clauses.
There are lenders who will lend a 30 year fixed to an LLC.
You can own a property in your personal name and use insurance coverage to protect yourself.
Before you even think about refinancing, make sure the property is a good deal that cash flows. The rehab has to come in at or under your budget. The ARV must come in correct or you won't be able to refinance anything.
Speak to a RE lawyer about protecting your rentals and personal interests should something happen. Having a property in an LLC does not guarantee that you will be 100% if something happens either. Shop around to different lenders and find one that will lend a 30 year fixed to an LLC. Search the forms for others who have asked the same question you have and you can find a plethora of knowledge.
Thanks for the info Alex!