Cross post from Business & Investing:



Wife and I are looking at purchasing some land and are curious to other's thoughts as to whether it would be more advantageous to purchase under our business or go personal. We are currently pre-qualified for a timber loan under the business, but could qualify personally as well.

We plan to eventually build a home and perhaps VRBO and also put a workshop that could be used as a training facility tied back to the business. Then of course there is the timber component.

Have heard that having a second personal property will likely be taxed much heavier in the future.

This is in NC.

We have a series LLC and would do it in its own series at a minimum. We will group a few like properties in the same series, but not let the valuation get too big of a target. Many will do each property in its own series. For properties over ~$1.5mm each or ones that hav ether own liability profile (higher than normal), we put it in their own LLC. There are other legal structures also, but in Texas they work well. Might want to talk to a NC RE lawyer specifically. Maybe a few, along with your CPA, and then decide.

We never buy anything besides our homestead in our personal name anymore.

Good luck.

Appreciate the info Davido.

Davido, I know you said you don't purchase properties in your personal name anymore, just you LLC. Have either of you purchased an investment in your personal name and deeded it over to your LLC? I've just started looking into what that process entails and the cost of doing so.

davido said:

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We have a series LLC and would do it in its own series at a minimum. We will group a few like properties in the same series, but not let the valuation get too big of a target. Many will do each property in its own series. For properties over ~$1.5mm each or ones that hav ether own liability profile (higher than normal), we put it in their own LLC. There are other legal structures also, but in Texas they work well. Might want to talk to a NC RE lawyer specifically. Maybe a few, along with your CPA, and then decide.

We never buy anything besides our homestead in our personal name anymore.

Good luck.

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Curious on this. Since the LLC is the purchaser, I'm assuming you have to get commercial loans rather than conventional?

Tonyperkis said:

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davido said:

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We have a series LLC and would do it in its own series at a minimum. We will group a few like properties in the same series, but not let the valuation get too big of a target. Many will do each property in its own series. For properties over ~$1.5mm each or ones that hav ether own liability profile (higher than normal), we put it in their own LLC. There are other legal structures also, but in Texas they work well. Might want to talk to a NC RE lawyer specifically. Maybe a few, along with your CPA, and then decide.

We never buy anything besides our homestead in our personal name anymore.

Good luck.

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Curious on this. Since the LLC is the purchaser, I'm assuming you have to get commercial loans rather than conventional?

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I've heard of some investors who purchase them in their personal name, then deed them over to their LLC after closing. They run the risk of the bank finding out and calling the loan due by doing it that way. But unless you are missing payments and could be getting foreclosed on, the bank most likely won't be looking at the title/deed history post closing.

Yes, if the LLC is buying, it's likely a local bank or credit union loan. I only do commercial sized projects now, so it's less of an issue. I'm not looking for secondary market SFR loans, which is where it would be more problematic.

The "unofficial" way is to buy it in your personal name, deed it over to company, but not file the deed. If the lender finds out, then it can trigger the "due on sale" clause. Pay on time every month and you won't likely have any issue.