Buying my first property, Transferring Deed, and LLCs

[Andrew Foster]

Hey guys,

So I have an offer accepted, I'm looking to close in 30 days on a multi-family in the Cleveland area. I'm curious on how to go about paying the down payment so that I will not potentially trigger a "due on sale clause", when I transfer the Deed to my LLC. I still plan on personally guaranteeing the loan to secure it. Should I have the funds come out of my LLCs account for payment or is it fine paying the down payment out of my personal account then once the property is paid for, transfer the Deed to the LLC. The LLC would collect rental payments in a business account and make the monthly payments on the mortgage operating like it should. (but mortgage would be under my name still). I've been told to "Wait a few months before transferring the Deed". In advance I'm sure people will ask why I would have it under an LLC for my first property, of course liability protection but the main reason is Taxes, I'm not trying to have the added income from the property be on my personal tax returns. I appreciate any and all input!

[Cameron Green]

It sounds like you're on the right track! I also own properties in the Cleveland area and initially paid for them under my personal name before transferring them into my LLC. It was super simple to do, and as long as you're personally guaranteeing the loan, you should be fine.

Regarding your question, it's generally safer to pay the down payment from your personal account first, then transfer the deed to your LLC afterward. This way, you avoid triggering a "due on sale" clause. Just make sure you document everything properly, and once the property is in your LLC, it can operate as you described.

As for your concern about taxes, keeping it under an LLC is a smart move for liability protection and managing income. I used the same LLC for multiple properties and only changed it when I adjusted my strategy. Creating a new LLC for each property can be costly in Ohio, so consolidating can save you money and hassle. You've got this—just make sure you have everything set up correctly!