In NC here. When I save up enough cash from my cash flow going into my business account, when it comes time to purchase another buy-and-hold rental I am assuming I can't finance with my LLC but with me personally. Can BP help me understand how to make a DP on a new property that I'm financing personally without mixing business and personal. Does this count? Other options? Ideas? All is welcome and appreciated!
Assuming conventional loan with a bank.
It's all your money in the eyes of the IRS with a SMLLC. A SMLLC is a pass through entity and the IRS doesn't recognize it as a business if used for real estate investments. With a SMLLC you are most likely going to need to finance through a commercial lender. As long as the money has been seasoned for 60 days it should be no problem which account it comes out of. You can get financing in the name of the LLC through a commercial lender but they will require you to personally guarantee the loan and the decision to lend will be based on your personal credit, not the LLC. Your experience in real estate investing will be another factor as well as the financials of the property you are purchasing. Skip the LLC and buy/borrow in your own name. Its much easier and less expensive.
Thanks @Rob Beland
Buying in my own name is fine. I guess I was concerned about how to use/transfer the cash without it being co-mingling. I don't know If I understand the rule about co-mingling business expenses with personal but i thought its wise to keep completely separate. So say i have all the cash for down payment in my business checking transferring that cash to my personal checking I thought was a no no? Am I mixed up somewhere?
Have you talked to the commercial lenders. You can still borrow in your LLC name, it just won't be a traditional mortgage.
Technically speaking making frequent transfers between the llc and your personal account is not a good idea. What could happen is called "piercing the corporate veil". Essentially you could lose the (limited) benefits you get from the LLC. Document what you are doing and you should be fine. Just dont do it often and dont do it for personal expenses.
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