I am under contract on a property under my LLC which I am financing using a Hard Money Lender. Once closed, can I then purchase the property from my LLC as an individual using a conventional mortgage loan (to get a better interest rate)?
Rental Property Investor · Fairmont, MN · Member since 2019 · 184 posts · 123 votes
4y
@Tiffany Na You want your LLC to own the property, if your LLC sells the property to you, the LLC is providing you no protection at that point. You can obtain a conventional mortgage if your LLC owns the property, you just will need to provide a personal guarantee on your LLC (this is very common). A bank will typically lend 70% to 80% of the purchase price, if you don't have the 20%-30% needed to close this is where a Hard Money Lender (or other creative financing, private money, partner, etc) could come in. If you buying with 100% Hard Money, make sure you have a plan to exit into traditional or some other form of financing as Hard Money is generally fairly expensive compared to other forms of financing.