In May I bought my second REI deal. My first deal was seller financed (see my post HERE) so I didn't need to involve banks, etc and made purchase with my LLC. It's owned and managed by my LLC with no inter mingling personal finances, etc. However, my second deal I didn't have seller financed and purchased with a conventional bank loan personally with a downpayment out of my personal checking; It's also in my name. I like to have it run like my first deal to where it's under my LLC but not sure the ramifications of me already using a personal loan and DP to purchase. I know there is something I can do with land trusts butâ¦ what is BPs thoughts? I'd like a way to either transfer everything to my LLC to where I can use my business bank account and under my business name or another strategy. Goal is mainly to protect myself and to keep accounting simple and centralized; also taxes organized, etc.
You can deed it over to the LLC. This could cause your lender to claim you have violated the due on sale clause of your mortgage.
I personally have not had a lender do this to me, but each time I have done this, there has been a year of on time mortgage payments before the move to the LLC was made. So it could be that either they did not notice or else they saw the payment history and knew that they still had the original paperwork where I personally guaranteed the loan. It could also be that they will notice at some point in the future.
Some people will tell you to talk to the bank in advance and let them know what you are planning. I have not done that in the past. I have also seen people state that even if they do get in touch; you can always transfer back again into your name.
Next time, buy it under the LLC's name but finance it in your name. That is what I did.
A deed and a loan are two different things. It runs a parallel with people who do subject 2 deals. The property is deeded over but the loan stays in place.
But instead of doing it that way and potentially having a bad day with the lender when they call the note due, put the LLC on the deed and your name on the financing.
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