All Forum Posts by: John Blythe

You should consult with your CPA. You do want to build up the credit history for the LLC, so it would make sense to operate everything out of there as far as receiving rents and dealing with contractors, etc., but as sole owners of the LLC, you have to avoid mixing personal funds and business funds so you don't lose the protection...

gotcha, good call. i'll make sure to get in touch with him and figure out what's what.

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Originally posted by @George Despotopoulos:

Hey @John Blythe were you able to review the closing documents before hand or have an attorney do so or at the least be present at closing?

This was usually something I explained to my clients at closing, if I repped the purchaser.

Now as in my new role as a co-founder of a non-bank lender, we are not held to the same restrictions or requirements that traditional lenders/banks are, and we do not sell to Fannie. So this clause does not come into play. This would be something we most likely would allow one of our borrower's to do.

hi, george. thanks for the info. nope, no attorney present. i was able to review the docs, yes, but combining my haste and general ignorance it didn't get caught. lesson learned!

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Originally posted by @Christopher Phillips:

You can't quit claim the house into the LLC, it will trigger the due on sale clause, especially if they told you already not to do it.

This is a common issue with LLCs. If you didn't pay cash and you only have one property it's not worth the headache of an LLC.

The bank wants to sell it on the open market. If you move it to an LLC it then belongs to a commercial entity and Fannie Mae doesn't allow that. So they'll force a due on sale clause and you'll have to scramble to get a commercial loan.

thanks for the clarification here, christopher. with all that said, does it help us in any way to create a bank account for the LLC and have our property manager interact with that rather than our personal accounts? or will that only create more headache than help come tax season?

best-

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Originally posted by @Chris Mason:

Originally posted by @John Blythe:

That being the case, what good is our LLC?,

The guy that set it up got to charge you a fee. So it was good for him.

ha, well thankfully i did it myself. if any money was pissed away it was only to the great state of indiana :)

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Originally posted by @Russ Draper:

For your first few properties, the bank wouldn't lend to the LLC as it has no history. You have to get the loan in your name, and then quitclaim it after purchase into the LLC. You still owe the bank on the loan, but if a "lawyer situation" comes up you personally are protected as the LLC technically owns the building. If you have to refinance later you will need to quitclaim it back to your personal name first.

thanks for the reply. i'm planning on doing an LLC per property in which case this will be the standard procedure (due to them never having a history before getting the property). so i can 'quitclaim' this thing w/o a mortgage needing to be transferred? mortgage stays in my name, LLC will 'technically own the building' and everyone is happy?

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Hi everyone.

I got a property with hard money, rehabbed, and then refi'd out using Quicken Loans. In the mist of trying to get out as quickly as possible before our hard money payments hit (they gave us 3 mo. period to get the house handled before payments would kick in) no discussion concerning LLC occurred with this lender.

I've now got an LLC established with my wife and I as members and have found out that they won't allow us to move the loan to be under the LLC. Here's what they said:

"If you were to transfer the loan into an LLC, this would go against the terms of the loan agreement, and would call the entire Note due. At this time, the loan cannot be transferred into an LLC."

That being the case, what good is our LLC? Can we still set up a bank account to handle all finances related to the property under the LLC? Our home owners insurance has the LLC and my own name listed on it, will this mortgage issue have any bearing on the insurance now?

Thanks for any insight as to what this messes up in the plan and what is of no consequence.

Best,

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wish i could! my son has basketball tonight. hopefully next time-

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All Forum Posts by: John Blythe

John Blythe has started 23 posts and replied 84 times.

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Post: Another LLC Discussion: Mortgage company won't allow move

Post: Another LLC Discussion: Mortgage company won't allow move

Post: Another LLC Discussion: Mortgage company won't allow move

Post: Another LLC Discussion: Mortgage company won't allow move

Post: Another LLC Discussion: Mortgage company won't allow move

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