HELOC under LLC or Personal?

[Joshua Boyce]

Hey Everyone,

Complex situation here (or maybe I'm just making it complex). I'll try to get the main details quick.

I own a house free and clear in an LLC. I have family living in the house and I don't charge them anything. NO PROFIT.

Applying for a HELOC just to have ready in the event the market turns down and we can grab something on the cheap. I'm running into road blocks due to it being in the LLC name. HELOCs are considered personal, and the LLC name categorizes it under business. Since ZERO INCOME is coming in, no one will loan under the business category.

What to do? 

My thoughts are transfer the house to personal name to get the HELOC, but I have 2 concerns.

1. The book keeping and taxes get messy since (eventually) the house will be producing income into my personal bank account.

2. Does this play well into my long term plan of owning 8 rentals free and clear? My thinking is that I could have all 8 in personal name with a strong umbrella policy. I'll just have to hire a bookkeeper to keep things organized and in line with our tax strategy. 

Am I over thinking this? 

Please punch holes in this plan and help me see blind-spots or options I'm missing. Thank you!