When do you put the deed in a LLC?

[Dan Marl]

Hello everyone.

I recently bought a house with cash and now I am doing a refinance cash-out and putting the loan under my personal name (delayed finance). My plan is to put the house under an LLC.

At what steps do you put the house under the LLC? Should I wait for the loan to close then put the deed under the LLC? Or should I let the mortgage broker/bank to put the deed under the LLC while still in escrow?

What are the pros and cons of each?

Thank you in advance!

[David M.]

@Dan Marl

Ideally, when you buy it. At least you purchased with cash. When you refi, you have the LLC give the mortgage. LLC's, like any other legal entity, are not eligible for conforming residential loans. So, you'll have to get some sort of commercial financing.

Just realize that lenders don't have any fiduciary duty to you, and they are in the sales business. They don't know, generally, or are looking out for your LLC's corporate veil. Having you the loan in your name and the Title in the LLC can screw that up --- co-mingling and alter-ego issues and all.

Yes, the commercial loans will be more expensive and generally worse terms. But, that is the cost of getting the limited liability protection of the LLC.

Hope this helps.  I'd be happy to chat.  Good luck.