Can you close your STR investment property in an LLC? Hint: The short answer is yes.

[AJ Wong]

The majority of our STR investors and vacation rental buyer clients ask or elect to close their acquisition in an LLC.

The primary determinant (beyond the tax implications) is whether the lender will underwrite and permit the borrower to close in a company or require the individuals to be reflected on title. 

The majority of conventional mortgages (full income verification) require the mortgage to be closed in the borrowers individual name(s). Usually only business purpose mortgages (DSCR or debt service coverage ratio) or non-conventional (Non QM) permit the contract and closing to occur in the businesses name.

Most borrowers that close conventionally can transfer the title to an LLC post closing. Borrowers will want to check with their mortgage broker or banker on any limitations to ensure the note cannot be called if transferred to a corporation.

The recording can typically be executed within 2-4 weeks of closing with the title company, there is a typically a cost associated with the recording.

Any similar experiences or cautionary tales regarding the use of an LLC for an investment property or STR acquisition?