How Does Purchasing a Property with an LLC Work?

[Tristan Cottarel]

Hi all,

I'm a bit confused here because I've heard all sorts of things.

Most books I've read tell me to purchase rental properties with an LLC. I spoke to a mortgage broker who said an LLC can not get a mortgage, it would need to be a commercial loan. Researching the topic further based on that statement, I understand a new LLC with no financial history will struggle to qualify for a mortgage without a personal guarantee (although I also spoke with an attorney who said that shouldn't be a problem as long as the property I am purchasing has income history). Just spoke with another mortgage broker who said the way people do it is: purchase the property under your name, then "quit claim and deed it to the LLC". Apparently they don't do LLC mortgages with personal guarantees. First thing I think of is due on sale clause. Would that be relevant in this situation?

How does it work???

I have browsed around BP but can't seem to find something that addresses this directly.