Looking to make first purchase in Ohio, LLC questions

[Tyler Case]

Hi,

My partner and I are hoping to dive into the Cleveland or Columbus rental market very soon. We are planning to purchase the property in my name on a conventional mortgage and then move it into an LLC. We are looking for lenders that allow the conversion of a loan from an individual to an LLC. We are also looking for connections to handle this type of transaction.

[Brittany Minocchi]

With conventional mortgages, lenders will follow Fannie and Freddie. Closing in your name and then transferring title to an LLC *could* trigger the due on sale clause. Is it 100% guaranteed that it'll happen? No, but it's a possibility. Many lenders sell the note once you close, so the lender you close with and the lender that services the loan are likely going to be different - there's not really a way to find out for sure if a loan will/will not be called due with a change of title. I have this conversation with every borrower I work with that mentions doing the same thing - whether or not it's worth the risk is up to you. If you want to close in an LLC and not have to worry about it, you'd need a business purpose loan. Hope that helps, feel free to connect.