Set up LLC for new SFH?

2 Replies

Hi All, I often heard people talking about set up LLC and put investment properties under LLC instead of personal name for the assets protection purpose. However, I didn't see many post on how to treat building new constructions and selling for profit. If a LLC should be set up, instead of selling the new construction under personal name, what's the good time to set up? Pre-construction, during construction, or after the property has been built? Also bank normally don't loan to LLC, then how to get the loan from bank for the construction? Thank you so much for the input!

@Ashley Zhang

You'd probably want to set up your LLC right before you close on your land and assign the contract to the LLC to close.

Banks loan to LLCs all the time but not for single family residential purchases. What you are doing is different though. You will need to talk with the commercial lending department at a local bank or credit union.

Definitely find yourself a small friendly bank for this. You will also either need a licensed/insured contractor or you will need to become one yourself. 

Originally posted by @Geordy Rostad :

@Ashley Zhang

You'd probably want to set up your LLC right before you close on your land and assign the contract to the LLC to close.

Banks loan to LLCs all the time but not for single family residential purchases. What you are doing is different though. You will need to talk with the commercial lending department at a local bank or credit union.

Definitely find yourself a small friendly bank for this. You will also either need a licensed/insured contractor or you will need to become one yourself. 

hi Geordy, thank you for your advice! I will need to contact the lender to figure out if they will loan to LLC.