Acceleration clauses and seeding to LLC

[Aaron Vargas]

I am part of a group of three individuals who are looking to partner to invest in a duplex. We have a newly formed LLC. I spoke with one lender and a mortgage broker that both said acquiring a property with an LLC would require a commercial loan. Interest rates are about 100 bps higher for commercial vs conventional loan, all else equal.

I know that it's possible to acquire the property as an individual then deed the property to an LLC but the lender could call the debt due from an acceleration clause. One lender told me flat out, we would not be able to deed the property to an LLC.

I've reached out to a RE attorney for guidance but I'm hoping to get some insight here. We're trying to get our investment pursuits off the ground but I'm having a hard time piecing everything together. I know it's done frequently, so I'm just looking to understand generally how LLC ownership is done. We will likely be making a cash offer then cash out refi after acquisition.

Thanks for your help!