Transfer Propety To LLC
I know that there have been previous posts on this subject, but I have a specific question as it relates credit. I can get better financing and lower down payment requirements by purchasing rental property in my personal name. However, this ties up my personal credit and increases my debt/income ratio. I have an LLC with its own tax payer ID and would like to transfer some personal property to the LLC to free up my credit since anything in the LLC does not appear on my credit report.
Has anyone fould a way to purchase property in their personal name and they transfer to an LLC to get the loan removed from your credit report ?
Please advise
[ Edited by Money4RE on Date 09/17/2005 ]
Thank you all for your advice. Very helpful !
Here is a FAQ concerning fictitous names in PA. I do not know the specifics of your state but in some states it is illegal to do business using a fictitous name that is not registered.
http://www.paopen4business.state.pa.us/paofb/CWP/view.asp?A=3&QUESTION_ID=441213
I say go ahead and register the name, that way noone else can take it and you would loose all of the advertising materials you have. Filing the FBN is $70 in PA, double what is is here in CA.
That being said do not put LLC, Inc, or Corp on any material untill you actually have that designation. I know here in CA it is a big thing.
As the LLC is taxed as a pass through entity unless you have elected for it to be taxed as a corporation the presence of the LLC is usually tax neutral.
Normally this type of transaction is considered SE income not capital gains as your intentions are to rehab and sell rather than hold for investment purposes.
You really need to seek the advice of a tax pro.
Run this question through the tax forum for the direction you seek ... then see a tax pro.
Thank you for the reply. Will do.