Can my LLC buy my house?

Question

Hello,

I am new to real estate investing but I have an FHA mortgage on my current home and owe about $191 on it. I want to purchase another house but can't have to mortgages. I just started my LLC, can I have my LLC buy the house for $215 and then it would become rental property under the LLC? What type of lending would I look for to do this type of transaction?

Kerlous Tadres · Answer

Hey! Since you already have an FHA loan, you won’t be able to get another one unless you meet specific exceptions. So for your next purchase, you'd be looking at conventional investment loans or DSCR (Debt Service Coverage Ratio) loans, especially if you plan to buy under your LLC.

Most traditional lenders won’t lend directly to an LLC for a residential property, so you’d likely need a commercial lender, portfolio lender, or DSCR lender. These loans focus more on the property's income than your personal income, which is great for investors.

Expect to put down 20–25%, and be sure to check with a lender who works with investors they can guide you on the best fit based on your goals.

Bruce Woodruff · Answer

Can you just Quit-Claim the proeprty over to the LLC? In some states you can.....?

Benjamin Aaker · Answer

Talk to the commercial banker at your favorite bank. You'll need a commercial loan. You'll have to get it appraised and hope it comes in at 215k. Then have an attorney draw up the sale contract.

Matthew Becker · Answer

Why can't you have a mortgage?  Yes LLC can buy a house but you have to qualify and sign for it.  But that will generally be harder and a more expensive rate then if you buy it in your name.