Personal HELOC with LLC

[Eric Waterman]

If I were to set up a HELOC with my personal residence could I use that to purchase properties to flip under my LLC?

[Jeff V.]

@Eric Waterman

Yes it can be done.

Several ways to accomplish this:

First way is to get the HELOC in your personal name using your home equity as collateral. Take a draw from the HELOC and deposit in your personal account. Then write a check from your personal account to your LLC's account as a MEMBER CONTRIBUTION. This will keep the funds accounted for properly. However with this method the payments and interest will be made from your personal funds being its really a personal loan.

Second way

Obtain a HELOC within your LLC using your PERSONAL home equity as the collateral. Then when you take the draws you just put the funds directly into your LLC account. You then pay the payments and interest from the LLC funds. It's much cleaner this way.

Either way, just know your personal home is at risk every time that you use the funds to do a flip ect.  So be sure and minimize your risk as much as possible and make sure you have plenty of reserves to cover yourself.

Hopefully this helps point you in the right direction.

Oh and either way you will have to guarantee the debt personally anyways regardless of which way you structure it.

Jeff V