BUYING RENTAL PROPERTIES IN AN LLC (PART 2)
NOTE: I am not a CPA or Attorney, please be sure to consult an expert to advise you on the best way to buy your rental property.
Click HERE To view part 1 of this video. I completely forgot to highlight the challenges of buying a property in an LLC. If you have a newly formed LLC, it may be very challenging to obtain financing through the LLC as it may not have the established credit or track record for lenders to establish credit-worthiness. As a result, many investors will buy a property under their name personally and then later transfer the ownership of the property to an LLC.
Often times if you get a mortgage under your name personally, there is a due-on-sale clause in the note which says if there is a change in ownership, the bank could call the note. I haven’t seen that happen, especially with folks that are current on their mortgage, however, it’s something that you will want to consider if you are going this route.
If you have any questions about acquiring rental property feel free to reach out to us!