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Updated almost 6 years ago,

User Stats

24
Posts
8
Votes
David Santana
8
Votes |
24
Posts

Sole-Proprietorship or LLC

David Santana
Posted

A little background I already got two properties rented (single home properties), their mortgages are paid in full so I created an LLC and decided to expand into fourplexes. The bank is telling me that any purchases of 4 units or less will be treated sole-proprietor with the benefits of any regular consumer mortgage including 3% downpayment and lower interest rates. On the other, the purchase of 5 units or more has to be done under a Commercial Loan which will require a hefty downpayment and interest rate 75% to 100% higher than through the sole-proprietorship

I have been told the transfer of the tile between sole-proprietorship and LLC within the first 5 years is frown upon by the Banks plus it could have negative legal consequences. The Bussiness plan called for the purchase of 1 to 2 fourplexes in the first year as the LLC is useless to grow the business, I'm worried about my liability in short term as I plan to use the two properties mentioned above as collateral. Any Ideas on how can I protect my assets.

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