Trying to be creative.

[Jeff Miller]

So here is my Idea, maybe someone can tell me if it is a good one, or not.

I have a MTG on my current home, we have approx 40k in equity. I just inherited a 2 BR 1 Bath in Ogden,UT. It needs a little work to be rent ready, like 15k. I want to borrow against this property to get it fixed up and possibly buy another rental. Once repairs are done I believe I could get 1300 to 1400 rent.

I started an LLC and want the LLC to buy the property from me, I was wondering if that would work? Could I as the property owner sell my own LLC the property, and could I do a defered down payment for the 25% that most lenders seem to want?

Hopefully that all makes sense.

[Chris Seveney]

@Jeff Miller

$40k in equity most banks will not allow that to be pulled, as they have strict loan to value requirements.

Whether you put properties in or out of a LLC, does not matter who owns it, but if you are seeking to get bank financing for acquisition they will want 25% down.

[Jay Hurst]

Quote from @Jeff Miller:

So here is my Idea, maybe someone can tell me if it is a good one, or not.

I have a MTG on my current home, we have approx 40k in equity. I just inherited a 2 BR 1 Bath in Ogden,UT. It needs a little work to be rent ready, like 15k. I want to borrow against this property to get it fixed up and possibly buy another rental. Once repairs are done I believe I could get 1300 to 1400 rent.

I started an LLC and want the LLC to buy the property from me, I was wondering if that would work? Could I as the property owner sell my own LLC the property, and could I do a defered down payment for the 25% that most lenders seem to want?

Hopefully that all makes sense.

The myth of the magical LLC is alive and well. You can actually only put down 15% on a conventional loan to but an investment property but buying/selling to LLC does not get you anywhere or change anything.

[Jeff Miller]

So hopefully to clarify, the only reason I want to use the LLC is so that I am the Seller and the LLC is the buyer. Then I, as the seller want to accept a deffered down payment, or carryover financing. So lets say the property is valued at 200,000 could a brand new LLC borrow 150,000 to 160,000 to purchase an investment property where the rent would be 1400 to 1500/month.

Or since I own the LLC is it strictly based on my ability to get financed?

[Tom S.]

@Jeff Miller  So the property you inherited is worth $200k and you want to get a $150k loan on it?  Why not just get a cash out mortgage on that new place? 

[Jeff Miller]

Quote from @Tom S.:

@Jeff Miller  So the property you inherited is worth $200k and you want to get a $150k loan on it?  Why not just get a cash out mortgage on that new place? 

I guess I have a tendency to make things as difficult as possible. Mainly I was thinking since it is not rented yet I may have a hard time getting a loan unless it was an investment property loan. I will apply to some local lenders and see where I can get going the cash out mtg route.

[Jay Hurst]

Quote from @Jeff Miller:

So hopefully to clarify, the only reason I want to use the LLC is so that I am the Seller and the LLC is the buyer. Then I, as the seller want to accept a deffered down payment, or carryover financing. So lets say the property is valued at 200,000 could a brand new LLC borrow 150,000 to 160,000 to purchase an investment property where the rent would be 1400 to 1500/month.

Or since I own the LLC is it strictly based on my ability to get financed?

It is YOU. An LLC is just something you paid 150 dollars on legal zoom to create. It has no income, no assets, no credit. There is nothing magical about a LLC or nor does it solve any real estate problems like down payment. You are the owner if you try to borrow with a LLC or if you borrow in your personal name. This would be the same if you are buying or cashing out.

[Don Konipol]

@Jay Hurst

“It is YOU. An LLC is just something you paid 150 dollars on legal zoom to create. It has no income, no assets, no credit. There is nothing magical about a LLC or nor does it solve any real estate problems like down payment."

Excellent, exactly !