I have 2 properties under my name but I want my next property to be under an LLC. Do bank give loan to an LLC or do I must purchase the property under my name then transfer the deed over?
Thank you in advance.
Newb
Generally, I recommend to clients buying in your name (MUCH cheaper interest), making some payments to the bank (get them used to some 'sugar") and then transfer to the LLC. Te4chnically, they can call the loan due. The vast majority of banks will not do so, because they are more interested in receiving more payments than creating yet another forclosure. The “Due on Sale” clause is the most over-hyped “problem” in RE. As a practical matter, its only a real issue in a small minority of cases.
John Hyre
Attorney, Accountant, Investor
John,
One of my properties was purchased as a primary residency, but it turned out to be a rental property. I am currently locked in on a 3-year ARM. If I create an LLC and transfer the property into LLC’s name, would I have to refinance as well?
I like the rate I have, but at the same time I would like to set up the protection structure that would minimize my risks.
Thank you
John,
I never have heard of an interest rate changing because you transfer property into a LLC? Why is that? Now, I would assume that you wouldn’t have to get a new note when putting a current property into a LLC? But I don’t know. Can you shed a little more light on this subject?
Thanks, Joe.