Legal Question in Real Estate Law in New Jersey

Purchasing Investment Property as an LLC

I just made an offer on a bank owned property in NJ. My husband and I created a Limited Liability Company and have taken some courses on real estate investing but this will be our first transaction and first year in business. I told the realtor that i wanted to put the contract in the Business name with me as the member. I am also planning to utilize cash borrowed from a private lender (who is actually my father). This is not a gift, it is a real loan. I will be paying him monthly payments with interest. She told me that I will need to provide my corporate seal and/or paperwork for the LLC, which I am able to but that i would not be able to borrow the money from my father for the deal. So she is recommending that I purchase the property in my name and then later transfer it the LLC. Can anyone offer any advice or reason that I should not go that route for either legal or TAX purposes. My plan for this particular property is to rehab it and resell it later...and invest the proceeds into another investment.


Asked on 10/04/07, 2:49 pm

1 Answer from Attorneys
John Corbett Corbett Law Firm LLC

Re: Purchasing Investment Property as an LLC

The realtor has nothing to say about whether you can borrow money from your father. I am guessing that buying the property in the name of the LLC would be a better plan for your. Transferring it to the LLC later would probably be costly and it sound unnecessary.

The only one who might object to lending the LLC money is your father unless you are taking over part of someone else's loan. I don't understand the objection so perhaps there are more facts necessary to understand your situation. If so, give a call.

See also: http://info.corbettlaw.net/lawguru.htm

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Answered on 10/04/07, 3:22 pm


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