Financing under mortgage then changing title to LLC help.

[Sherri Behrendt]

Hello Bigger Pockets Forum, 

I just bought my first lake house for Airbnb and personal use in Clear Lake, Iowa. We intend to pay cash to get the deal and then finance to free up cash to reinvest in other properties. We have an LLC for this property and my long-time bank understands what I am wanting to do to lock in 30 year fixed instead of 20-year business with ARM. My lawyer said to ask the bank if they will not exercise the due on sale clause to transfer to our LLC after closing in our personal name? Bank says they can't take that out or can't sell on the secondary market.

Any suggestions on how to do this without issues? I will increase our insurance umbrella until I can get it in our LLC name, but if you have any suggestions that help accommodate this process, please advise the best avenue to pursue.

Thank you

Sherri Behrendt, Behr Assets LLC

[Caroline Gerardo]

If you want low rate with government backed conventional loan you can vest in your name or a Revocable Living Trust. Changing the deed after the fact to a LLC is a SALE and will often have the lender call your loan as due in full. People on BP love LLC vesting because someone convinced them for a fee $ it will protect you from harm. If you want the LLC vesting you must do a higher rate commercial loan. If you keep the property from health and safety violations, manage like a business, and carry good insurance you are best off vesting in a single entity Revocable Living Trust- this gives you stand alone one property protection and saves a boat load of money. Trust vesting allows you to file one tax return and avoid paying a CPA to file many returns, no annual state filing fees, no keeping up the annual fees in various states, no worry about mingling money. The "bank" that closes your loan cannot and will not write a special rider for you- they are selling the loan off three days after you close.