At what point would I quit claim to an LLC?

Question

If I were to obtain a property through non-conventional financing (owner financing, private money, etc), with the intention of conventionally financing after a certain period of time (6-12 months), when exactly would I quit claim the property into an LLC.  Do I wait until it's conventionally financed?  Do I quit claim it asap, then take it out to eventually conventionally finance, then quit claim again?
            
            Thanks!
            Fred

Fred Shandler · Answer

Thanks for the response, Lou.  I did not think about tax implications.  I'd be interested in hearing how investors manage their properties in this scenario (that being, the property is held in your name with the intention of eventually quit claiming it into an LCC, etc).

Does your entity still write/receive checks, even if the property is in your name?

Thanks!
Fred

Jon Holdman · Answer

Also ask your broker about recent Freddie Mac rule changes that disallow financing for a property that's been in an LLC.  I've heard it must be out for six months.  Also heard it can't ever have been in an LLC.  Not sure the reality.

Lou Castillo · Answer

Fred,

talk to your mortgage broker to find out more about your potential lender's requirements. Here are some things to think about - they most likely will not allow for the property to be in the LLC name so at the time that you want to re-fi it will have to be in your personal name. What you want to know is whether they are going to want some seasoning in your name - in other words - require that it be in your name for a certain period of time.

You'll also want to check with your CPA about the tax implications of moving the house in and out of entities.

Be sure that you also check your hazard insurance and title insurance each time you re-title the property to be sure that the proper entity is insured.

Fred Shandler · Answer

Does anyone who has done an owner financed or privately financed deal, have experience with this situation?