Buy with LLC or Personal Name?

[Michael Perry]

I'll say up front, I've already purchased my first rental property in my LLC's name. I financed it by getting a HELOC on my personal residence. So now I own this renovated rental free and clear and I have a tenant who pays 1200/month. I'm into the deal for about 50k. It will appraise for about 70-75k. I'm in the Gwynns Falls area of Baltimore City.

I'm finally at the point where I'm looking for a lender who will give me financing so I can pay off my HELOC and do this all over again. But I'm discovering that I would get better rates and terms if I owned this property on my personal name instead of my LLC's. But I originally put it into my LLC's name so that my personal assets would be protected in the event something went wrong and I also wanted my LLC to actually become a money making entity which it has not been until now. I've heard of people buying their first 5 in their name and then transferring them to an LLC? Should I transfer this one for a better rate? or should I keep it in my LLC and get 6% 5/1 ARM over 25 years?

[Ben Sears]

If you're looking to expand your portfolio, you would be wise to continue holding in your LLC. The protection you gain from a properly formed entity far outweighs the savings on interest rates. As long as your property cash flows, keep it as it sits. If you're looking for a better rate, hit some local community banks. You may find that getting out from under the big banks will help with your rate.