Purchasing with an LLC

[Kristin Montgomery]

I'd like to purchase my investment property as an LLC but I was told by a loan officer that I would do that after the loan went through (which carries risks). Has anyone been able to do this up front?

[Kevin Sobilo]

@Kristin Montgomery, I disagree with @Ed Brancheau.

I don't believe your lender said that because your LLC is new. I believe he said that because of the type of loan you were trying to get. A conventional conforming loan can only be made to a person not an entity like an LLC. So, people commonly buy a property with these loans in their own personal name and then use a quit claim deed to transfer it to their LLC WITHOUT changing the loan over to the LLC's name. In doing this they run a very small risk that the lender will call the loan due based on the due on sale clause. People do this a lot and rarely does anyone report an issue.

You absolutely can get a loan with a brand new LLC but it will be some kind of portfolio loan from a private lender or a community bank or credit union most likely. The rate and terms may differ quite a bit from the 30 year fixed rate you are accustomed to. Also, your LLC will likely NEVER have be able to get a mortgage without you also personally guaranteeing the debt (like cosigning) but that is OK and normal. An LLC is meant to protect you and your other assets from liability aka being sued.