Hard Money and Private Money

[Nicholas Acosta]

If I'm using an LLC to purchase a property with a hard money loan, but I am borrowing money from a family member for the downpayment.. How would I receive that money from my family member? Would it go to my personal account and then transfer to LLC bank account or does it have to be some other way? Does it have to be a loan with a contract and interest etc even if it's just someone letting me borrow downpayment money for my first few flips? How would that work? Please advise..Thank you

[John O'Leary]

Good Morning Nicholas,

If the family member is on the LLC the funds can remain in the family members account and be wired to the title company directly from that account. If the family member is not listed on the LLC lenders will typically want to see the funds be wired from your personal account, or the account of the LLC purchasing the property/taking out the loan. Gifted funds are ok, so no loan needs to be in place.