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Updated over 3 years ago, 04/23/2021

User Stats

1
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0
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Wade Fisher
  • Realtor
  • Calabasas, CA
0
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1
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Allocating from business account to fund primary residence

Wade Fisher
  • Realtor
  • Calabasas, CA
Posted

Hey everyone, I've been lurking here since last fall, and finally have a legitimate question I'd love to get some feedback on. I will be speaking to a CFP on Monday, but wanted to check here to see if anyone had dealt with anything similar.

My dad and I live in California and have a partnership LLC with around $50k allocated in a business account to begin purchasing BRRRR properties in other parts of the country. We're planning on starting with one and scaling up over time as most do. However, to ultimately help with our investment financing my wife and I are interested in buying our own place here in the Los Angeles area to begin building equity here and not have a rental payment impacting our DTI. We also have a friend who is moving in with us this summer and will be paying rent to help reduce our expenses, and will move with us when we purchase so we'll already have a little built in mortgage expense reduction.

My wife and I now work full time after a rough past couple years of our work situations (mostly mine) being a bit all over the place. Thanks to our circumstances over the last couple of years we only really have about 6k in savings, some of which is currently intended to be used for initial stock and crypto long-term investments. As per trying to accomplish this using 100% other-people's-money we do have approval from my dad to use what we have in our business account to help us with our down payment. We've already been preapproved to put 3.5% down on a conforming loan for a primary residence.

That's the context, and my question is ultimately: What are some legal and tax efficient and effective methods that could be recommended to look into for using the liquidity in the business account to cover our down payment and closing costs? 

I'm assuming I can't just withdraw x amount from a business account to use personally (for money laundering reasons), and have been trying to research and come up with other solutions (hence why I'm speaking with a financial planner next week) and would love to know if anyone in this community has been in or dealt with a similar situation. And lastly, is the best solution for my dad to make a withdrawal, and then disperse $15k each to my wife and I as tax-free gifts?