Need a good advice regarding financing and LLC.

2 Replies

Hi everyone, I'm a beginner investor in real estate I do own 3 properties my primary home and 2 rentals. All 3 have conventional 30 years loan all rentals has positive cash flow, I owe $45,000 on my primary home loan today value around $410,000.

My plan is to take a HELOC to buy another property duplex preferably in another state for cash instead of a conventional 30 years loan and refinancing with a commercial loan.

Now if I buy a property for cash and I open a bank account with an LLC. and ask for a commercial loan so I can pay back my heloc is this legally ok?

Thank you

Assuming your LLC will be single-member, any profit would just flow down to your personal tax return anyway - as the LLC is essentially just you with additional liability and asset protection. So I'd think you'd record money from your HELOC to your LLC (to purchase a property) as a loan, and when you take money back from the LLC, its repayment of that loan. Beyond that just keep the business and personal funds separate and track everything in/out (such as in QuickBooks) - and it seems perfectly fine. You may also wish to inquire about a 1st position HELOC on your primary residence, as its a powerful method of funding additional purchases with equity from your home and potentially saving a ton on interest in the process.

Thanks Jonathan for your reply, well I do not have an LLC. set up all of my 3 mortgage are in my name that is why if I purchase a property cash and it is free and clear then set up an LLC go to the bank and ask for a refinancing cash out commercial loan, my understanding is that if the property is rented and cash flow positive and of course my personal finance in order with excellent credit record I would imaging no have any inconvenient.

With that cash out pay back my HELOC and yes I do understand to keep personal and business separate.

Thanks again.