Problems Buying In LLC
Why is my mortgage broker telling me that I can't buy a property in an LLC? He says that he can't get the deal done. Can't get a good explanation. I have to buy in my name and then deed to my LLC later. (Which, of course, could cause the D-O-S to rear its head, right?)
I don't see why it would matter to a lender. I am personally on the hook for the loan either way.
What is he talking about?
The mortgage companies want to see you on title not your LLC in case your LLC goes bankrupt
[addsig]
Yeah, but I AM ON THE LOAN, not the LLC. They don't have to go to the LLC for payment. So, what am I missing?
Yeah, but I AM ON THE LOAN, not the LLC. They don't have to go to the LLC for payment. So, what am I missing?
If you're on the loan and LLC is on the deed, then you have no property to backup the loan collateral. If your name is on the deed alongside of your LLC, why have LLC to begin with. If you buy as LLC with loan paperwork in LLC name, then is it an OO(owner occupied) loan or investor loan. You may qualify for one, but not the other. Talk to a different mortgage broker, who has more experience with investors. OR write everything in your name, and then just quitclaim the deed into your LLC in 30 days. It all gets to be a whole lot easier once you actually get the loan.
-Greg
OK; I like the "quitclaim" response. But, does that open me up to the due-on-sale?
To all,
BUT what are the chances on triggering DOS clause by quitclaiming? Can someone please explain this thoroughly?
What about escrowed notes where the insurance company bills the lender annually? They will eventually get word of the title switch....right?
Technically quitclaim is not a "sale". But here's a different solution. Have BOTH names on the contract, finance in your name, and then take yourself off with quitclaim. So there is no ownership transfer, there's just an interest shift. You go from 50/50 to 100/0.
I took the route of getting the loan in my name and planning to quit claim the deed to the LLC after the sale. But do to a last minute change in funding, the I ended with a local bank which the broker told me specifically that they would not accept a LLC holding the note. When you all say to quit claim after 30 days, are you doing this against the banks will? or you just not telling anyone and just hoping no one checks?
Also can this be done if you are using VA on the loan?