Purchasing 8 units under personal name or LLC

[Sam Shah]

We have an 8 units (2 buildings with 4 units each) that we plan to purchase. Two options we are considering

1. buy them under personal name at interest rate of around 3.X

2. Buy them under LLC but then it will be considered commercial loan and interest rate bump up to 5.X

Question that I have is that for liability reason, I'd prefer getting the loan under LLC. I was told by one of the loan office that I could possible close under my personal name to take advantage of the lower rate and then move the deed over to my LLC later.

What I need help with is if someone can advise about this strategy. Would this work? Do you see any issues with this approach? Would you recommend doing this?

any downsides you see doing it this way?

I really appreciate any help someone can provide on this

Thanks

Saumil

[Richard Neuharth]

Yes it can work. I would ask if there is a due on sale clause. With commercial loans it can go either way. With a residential loan it is pretty likely that there will be a due on sale clause. If there is then changing the deed could trigger the lender to call the note due. Usually it is very unlikely but should still be considered. It is done quite often in the residential space.