Transfer Ownership To LLC With A Loan's Due On Sale Clause (HOW?)
Hello all,
Our current situation:
- - 4 partners own the duplex. Currently in our personal names.
- - 4 partners are equal members in the LLC.
- - 2/4 partners are on the loan. In their personal names.
We'd like to:
- - Transfer the ownership of the duplex from our 4 personal names, to our LLC.
Problem:
Per our loan's "due on sale clause" (listed below) - The bank considers this transfer of ownership a sale. When someone sells a property, the loan is due. Thus, they will expect us to pay back the loan in full.
What is the solution?
- - Some of you have suggested: "Just explain your situation to the lender, they will understand and complete the transfer." But what if they say no?
- Is asking the lender our only option? - - Is there any other possible work-around?
Our loan is with BSI Financial.
We've read all the BiggerPockets books and were frustrated to find that this clause, which is commonly found in every loan, was not covered anywhere.
Thank you all in advance for your help.
Sincerely,
Greg, Brady, Myles, Tristan.
