FHA/Conventional loan to a future LLC?
Hello all,
I'd like to understand better the situation with securing my investments long term.
Can someone help clarify - Once a property is purchased with a conventional loan, under my name and under my taxes, what is the process of forming an LLC and moving my property under the LLC?
Does that means that I will have to switch the loan as well to a commercial one?
Once an LLC is formed, based on what factors will the lender consider to loan?
Logically thinking, if the LLC is new, there is no history nor credit score to the LLC as a separate entity.
Is there any relation to me as an individual?
Can someone pour some light on this topic? what is the process? does it worth it? Is there anything I need to be aware of prior to purchasing the property?
@Assaf P. You should speak with a real estate attorney in your area. You should be able to setup an LLC as a single-member and quitclaim your property into the LLC, after you have purchased it. You will not have to change your loan on the property, as the LLC will be taking over the property subject to the existing mortgage. So, you will still be the guarantor on the loan. CA has a hefty minimum franchise tax for LLCs, so you'll want to take that in consideration in your cash flow analysis before purchasing the property. Hope this helps.
@Bob Norton thank you very much. That was very helpful
