I have a situation I am in. I have been waiting for a perfect piece of land to become available for purchase for an apartment complex I would like to build. I have just learned that this land has become available for purchase but I have a problem. I am currently building some duplexes that I will utilize as rentals when construction is completed. With these, I have maxed out the ability to have enough to buy the land outright like I had planned and use that for the down payment on the construction loan. Here is my question: If I pay the down payment and put the land in a family member's name, can I quit claim the property over to an LLC (or to myself) and use the whole land value as collateral for a construction loan? This way I can purchase the land and still save more than enough for interest payments on the apartment complex before the duplexes are completed. We have all heard of banks requiring the remaining loan be payed off in full when quit claiming to an LLC but what other red flags would be thrown up when dealing with banks and the construction loan?
I really am not trying to throw a fast one on the banks at all, but I have been waiting for this deal for a while now and am looiking for a creative way to make it happen. What are my options? What sort of problems might arise, if any?
Thanks
I really am not trying to throw a fast one on the banks at all, but I have been waiting for this deal for a while now and am looiking for a creative way to make it happen. What are my options? What sort of problems might arise, if any?
Thanks
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