Restructuring HELOC into LLC loan to buy investment property

[Jessie Huffey]

It has been awhile since I've been on the forums but I am needing some input regarding the best way to structure the purchase of our next investment property which will be in Central Louisiana (we will be touring properties Feb. 9th and 10th and making a decision on which one to go with at that time). So, my original plan was to use our personal HELOC to buy and rehab the property. Under the new tax law, the interest from the HELOC would no longer be tax deductible so I was thinking I could use the funds from the HELOC to make a formal loan (promisory note, ammoritization schedule, etc) from myself to our Construction LLC and then buy the property and rehab it under the name of the LLC, because interest paid for business loans is tax deductible. Are there problems with my plan or a better way to do it?

[Kyle Steiner]

Interesting question since I am in a similar situation in terms of using a HELOC for purposes of rehabbing property. I’m interested to see what responses you get.