Blog entry: Entity Vesting...

Cynthia from Middlebury, Connecticut asks:  A partner (business associate) and myself are considering investing in a 16 unit apartment building.  This is our first joint venture together and need to know if it's possible to title the property in the name of an LLC we are about to establish?  We would prefer to keep this property in the name of our LLC, and possibly  invest more eventually, but we have had little luck in speaking with a few real estate agents that we are friends with.  Is this possible to do and what are the procedures to do so?

Hello Cynthia,

Thanks for your question.  This is a good question and fortunately for you and your partner - the answer is yes it is  possible and relatively easy to do exactly what you are asking.  There are many other borrowers currently doing the exact same thing that you and your partner are looking to do.  Multi-Family financing (more than 4 units) will in almost all cases be considered  "commercial financing" and most commercial lenders will certainly allow "entity vesting."  Entity vesting means that the title of the property would be vested in the name of the entity - in this case, your soon-to-be-formed LLC.  Most lenders are going to ask for specific documentation as it pertains to the LLC as well as specific information from the borrowers involved regarding the property.

Although I'm sure you may have already done so - it's always prudent to check with your team of accountants & attorneys to make sure to review the transaction prior to moving forward.  In addition - they can help counsel you on some of the tax/legal advantages/pitfalls based upon your particular financial situation. 

Please give us a ring should you have any further questions!  Good Luck!

***TS***