Can I buy my rental from my LLC?

Question

We have a SFH on a commercial loan under a single member LLC.  I would like to get it onto a 30 year mortgage.  Since it needs to be in my name for a 30 year conv. mortgage, can I purchase it from my LLC ?

Chris Mason · Answer

If you owned the property before the transaction, and will own it afterwards, it's not a purchase mortgage. It's a refi.

Tom Degroodt · Answer

@Chris Mason. Thanks. That was my assumption, since the LLC is a pass through entity. With the way the world is going I want to lock into a 30 year interest rate if I can.

George Despotopoulos · Answer

@Tom Degroodt you can do a 30 year fixed cash-out refinance and keep it in the LLC (or transfer it to your personal name, whatever you like). You can go conventional or to a community bank/credit union or you can check out what non-bank lenders have to offer. Right now, a 30 year fixed rate, with 5 year prepayment penalty @ 75% LTV could be as low as 4.75% - 5.125% w/ a non-bank lender. It depends on the property's location, value, property's income/cash-flow, and your credit score.

Andrew Postell · Answer

@Tom Degroodt if the purpose of this question is to get a 30 year, fixed rate loan you can certainly do that without having to transfer the title from your LLC.  You would just need a commercial/portfolio style loan is all.

Carlin Randolph · Answer

You can buy it, yes. And you will need to get a 30 yr loan that will cover your existing loan + closing fees. You will pay transfer tax and a little more than necessary if your llc recently bought it. Also, you will be personally liable for anything that goes wrong with it. We live in a money-hungry society and tenants, pedestrians, contractors, and refused tenants are looking to sue or get hurt to sue.

However,consider that the bank is more than willing to refinance that commercial loan as long as it is making an income that makes sense. Also consider that if the income is not making sense for the bank it doesn't make sense for you either. The commercial rate will be higher, yes. But again, that rental should always cover the debt service and make a profit for you. If I may ask, whyis it so important to have a 30 yr?

Can I buy my rental from my LLC?

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