Property purchase transfer from personal to LLC

12 Replies

I'm about to purchase my first property with a loan, but the loan will be against my personal credit but i have an LLC that i would like to have all present and future properties purchased under, how do i go about purchasing this and other properties under my LLC? do i purchase them and then transfer them over to the LLC or is there a way to purchase them solely under the LLC? Any suggestions?

Buyers name in contract should be your llcs name from the get go so your llc purchases. That will save you transfer costs later from personal to llc. Also make sure your llc is the insured and not you personally.

Ask your lender. Some won't allow to buy the property under the LLC name.

I generally lean toward purchasing properties personally, then transfer the property into an LLC after the purchase. Doing it this way will offer you better financing, compared to the commercial loans you will get through the LLC (not to mention that some lenders wont even work with you.) In the past the only way to do this to avoid the Due on Sale Clause was through a land trust, but with more recent conventional loan changed you may not even have to take that step.

It can still depend on what you want and the terms that you are working with. Generally this helps protect investors by providing the liability protection and save them money in the process.

@Dean Wright - How are you financing the properties? That'll determine how you buy them. If you're buying in cash, private money or a commercial mortgage, then just buy them in your LLC name from the very beginning. If you're getting a residential loan to purchase it, then it would need to be in your personal name, but then you'd be violating due on sale clause if you transferred it into your LLC name later.

Hey @Dean Wright ,

If you purchase them in your own name and transfer them over or purchase them in your LLC you will need insurance. The insurance policy can be made without your personal name on it at all. Let me know if I be of any assistance for you with that. I am looking to help.

GOOD LUCK ON YOUR INVESTING!

@Dean Wright , you can absolutely transfer a conforming loan to your own LLC, as long as your lender sells the loan to Fannie Mae (not Freddy Mac). See my Blog more details and techniques to guide your servicer: How to Transfer Property to your LLC without fearing Due-on-Sale

When Fannie doesn't own the loan, it's up to each lender to make their own rules.  Just ask them...but, be very clear in your request: 1) you want the servicer/lender to approve a property transfer only and 2) You aren't requesting a release of liability, and you aren't seeking a loan assumption.  The worst they say is 'no', and it costs you nothing but a few phone calls/emails.

Sidebar: Maybe we need to all call Freddy Mac and request that they update their Servicing Guidelines to be better aligned with Fannie on LLC transfer rules?