All Forum Posts by: Kerry M.

The family member was going to pay rent and she asked for an extension of paying rent right after moving in.  There is no written agreement and the owner of the home is elderly.

A friend has let her family member stay since Dec 30 in her basement.  However the family member is not following house rules and becoming a problem.  What does my friend need to do

I would try Sue Greer, an attorney at Title Professionals in La Plata, MD.  I don't know if they do what you're asking but they seem very able to find solutions.

We also got a loan in our personal names for a rental property originally held in the name of an LLC. It had to come out of the LLC for the loan to go through but because my husband and I were the original and only owners of the LLC, it could change again without a transfer fee. The lawyer at the title company who closed the loan submitted paperwork to change the property back into the LLC's name. The loan officer knew that this is what we planned to do and was O.K. with it after the lawyer said it was O.K.

We are seeking a first mortgage from a local bank for our 4-plex. We had renovated it since purchase. The loan has to have the property titled in our names, not the name of the LLC. How do we account for the debt if we were to dissolve or cancel the LLC at the same time as changing the names on the title? When I am able to repay the debt later I want to be able to deduct it.

Our main concern is the debt (all unsecured) which we took out in our personal names and then used for business purposes. How do I write down who owns the debt and what happens to the debt if I were to dissolve or cancel the LLC (recommended to avoid the transfer tax while getting the loan.)

If we cancel the LLC, we are still paying back the debt because it is in our names. How does the debt transfer from the LLC business to our small business?

We have not yet started repaying ourselves because 2012 had no income and 2013's apartment income is still overshadowed by the renovation expenses. 2014 should show a profit.

How we deal with the debt is an unknown to us. Do we want to be able to deduct the repayment of the debt to ourselves? Can we do that if the LLC closes?

An attorney explained that if we put the property in both our names, being also the original and same owners of the LLC, there is an exemption to the transfer tax. The loan requires that we change ownership out of the LLC. The attorney for the bank is suggesting that to dissolve the LLC to avoid the transfer tax. If you know, can we avoid the transfer tax but keep the LLC? We are willing to give up the LLC on the title and as a business structure if we knew how to account for the debt in our names which is associated with the business.

Thank you!

Kevin,

I wish you success. No, I didn't purchase and so don't have help in this area.

Kerry

Trailer in a college town for sale for $10,000. Lot rent is $250-315, depending on water/sewage/trash/taxes. Condition well cared for, not moved; old but no repairs needed. 2 bedroom, 14 by 70. Renting one room in a shared apartment runs $4-5,000 per school year for that area. Room and board at the college is $8,000/school year.

Question: given the need to pay for room for (my) student attending college or purchase of trailer, how do I tell at what point one option is financially better than the other?

Thanks!

Somebody prayed. I met with the senior banker and almost canceled that afternoon's meeting with another banker. The second banker has more leeway and writes a wider variety of loans. He is offering a conventional 30 year fixed with possibly keeping the title in the name of the LLC. We are waiting to see what underwriting says. Thank you all.

Lynn M. I have our primary residence and the property we are seeking to finance, so a total of two? Thank you for explaining the difference in the amount that we can pull out.

I talked to a senior residential banker this morning who said that Freddie Mac's requirements are the ones he has to pretty much go with. Their requirement is 180 days for changing the names on the title. He recommends going with the local bank with the commercial loan being offered and refinancing in 2 years, perhaps changing the names on the title 6 months beforehand. He says in two years our equity, debt and seasoning issues would be gone and we would have two years experience with being landlords and two years rent income and would be very much in demand for banks wanting to do a refi.

Unless someone sees a better option, I guess we'll go with the commercial loan.

Thanks for all,
Kerry

Joshua Andrews
Thank you!

Well, there has been confusion on the commercial/type of loan. PNC said I would do better to do a second home mortgage than commercial. The first bank I have worked with the most says commercial, I thought because it was owned by an LLC. A Farm Credit bank said they can do residential if it is under a certain amount, no matter how it is held.

I mostly want to avoid the refinancing in 5 years which would come from a 5/20 loan. I'm also looking for a higher percentage of loan.

My best scenario would be to leave it in the LLC name but have a residential loan for the long-term rates. It is a home that we would like to hold on to for a long time.

Thank you very much Joshua.