Buying as an LLC OR Transferring to LLC?

[Sefa Demirtas]

(I previously posted this question on a different subforum but probably better fit here)

Hey Biggerpockets community,

I am looking for my first investment property and in the meantime talking to lenders, my CPA, etc to educate myself about legal and financial implications of any moves in advance. There is one thing I am very confused about and I wanted to get your opinion on the matter here.

Since I have my primary residence (condo with 27 more years of mortgage payments), my CPA recommended that I buy my investment property as an LLC, not on my name. This made sense from a liability viewpoint, but I realized the loan would be now considered commercial and rates would be much higher (about 0.5 to 1.5 more depending on property). Plus they require higher downpayment % that I would like to avoid. I called 4 different lenders to hear my options. Lender A said I have to do LLC before closing and close with that name and pay the higher rates. Lender B said if I close with my name and then transfer to an LLC after closing, the bank or credit union may call the loan and force a closing, but it is unlikely (whatever that means), and usually they wouldn't even increase the rate. Lender C said I would not be able to close it with a fresh new LLC because that LLC wouldn't have had any performance to show or tax returns to present during underwriting, and the way that most of her borrowers go is to close with their name first and within an hour of the closing, create the LLC with the help of an attorney and transfer title right away (not sure if this is even possible!). And finally Lender D said I can close with my name and transfer to an LLC, but this may trigger a taxable event, the bank may call the loan (like Lender B said), or an increase in the rate from residential rates to commercial rates may take place or may not even allow the title transfer to an LLC.

Not sure which one is right, or which way I should go about to both have the liability protection as well as the milder loan conditions if possible at all (lower downpayment and lower rates). Please let me know your thoughts.

Thanks in advance.