Hello all! I'll detail my situation with a quick overview and what I am wondering is possible.
I currently own three properties. Two are single family rental units. The third is my primary purchased this year. The third home I rent out bedrooms, and after one year of ownership I intend to purchase another home as primary residence.
My lender said I should have one lease vs the multiple roommate agreements to qualify the income for DTI come next year. Would I be able to put the home into an LLC and then rent the home to my own LLC so that I can capture one lease contract with the LLC that I own to qualify the income? The LLC then would lease to the roommates.
I might make a LLC, as a property mgt LLC. Sign a contract between yourself and the LLC. Now, the LLC rents out the rooms while you show a long term lease with the LLC. Its like a rental arbitrage with yourself. However, its pretty "silly" since its all yourself...
I don't have experience with this, but are your room-by-room leases long term? If they were short term I could see the issue. But, a long term lease is a long term lease, in general.
@Eric Preneta NO - you cannot put you home into an LLC and then Rent it to your LLC as you asked. How can you rent it to your LLC if the LLC owns it?
You could potentially do a master lease to your LLC, so you have one lease and the LLC can have separate leases with tenants. The problem is the loan that your lender is talking about probably isn't available to your LLC. It will be a different program to your LLC and you need see what the qualifications are for that type of loan.
Next consider capital gain taxes. You may be giving up a substantial tax break for homeowner properties by transferring to your LLC. Talk to your accountant about this.