Moving property to my LLC

[David Garcia]

I want to secure rental properties I purchase under my LLC to mitigate risk but have run into a few hurdles. I own one rental property outright and am seeking financing to purchase another property. I also have an LLC setup but have done nothing with it. I've called several banks about opening a business account in my LLCs name and getting financing but they are telling me that I have to personally hold the property in my name and can't move it to my LLC until I pay the loan off. I understand being personally responsible for the loan but don't understand why I can't put the home in my LLCs name. Am I going about this the wrong way? Are there any good books that walk you through this process? What's the point of have an LLC if I can't buy properties in its name?

[Ed Wood]

correct! All loans on 1-4 unit rental property are backed by Fannie/Freddie guidelines you will not find a lender who will fund a loan in your LLC, Partnership or Corp! There are alternative financing but you probably want the low 30 year fixed Fannie/Freddie backed rates I'm assuming?

What is commonly done is you pull the property out of the entity fund the loan then put the property back into the entity.

People will argue it will trigger the due on sale clause but I am unaware of any of that happening. Worse case is if it does trigger the due on sale clause is the give you something like 30 days notice and you just quit claim it back into your into your name.