Buying process questions

[Robert Pangborn]

Hello everyone.
Let us assume we have found a SFH or even a Multi-Family. Ran our numbers, did our due diligence, and made an offer that has been accepted;

1) I have an LLC, but when researching banks, they will not lend to my LLC because it has no credit established. I am being told I must apply for the loan myself. Is this correct or am I going to the wrong places?

2) If I purchase the property in my own name, how do I transfer it into my LLC?

3) Can anyone explain the process of purchasing the property using my Self directed IRA?

I will stop here. I find if I ask too many questions at once, I am unable to retain the copious amount of information that is supplied from the knowledgeable people here on BP. :)

[James Vermillion]

Robert,

I will take a stab at a couple of your questions.

1) I am not sure what kind of lenders you have been talking to (large banks, regional banks, community banks, etc) but I have found most smaller banks are willing to lend to an LLC if they get a personal guarantee (from you) to go along with it. Also, they will consider your personal credit, debt to income, and other factors as they would if you were getting the loan yourself. This will get the loan in the name of your LLC but protect the bank should your LLC not be able to manage the debt (ie you will personally be responsible).

2) There are various ways you can transfer a property to an LLC post-purchase. You can transfer into a land trust and make the LLC the beneficiary, or just transfer the property direct to the LLC. Most mortgages have "due on sale" clauses meaning the lender can call the loan if the original owner does not have the property any longer. There has been a lot of discussion about ways of transferring properties and the pros and cons on BP (use the search feature to find some of this discussion).