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#2154150 - 11/17/17 10:10 PM Reportable or Not??
swiggles Offline
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swiggles
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Borrowers purchased some investment residential real estate outright in their personal names....last year. Then they improved the real estate with their own money to get it ready to lease out. Once the improvements were complete, they requested a cash out loan for the property's value. So....not improvement loan, not a refinance. However, in the process, they converted the loan to an LLC. So it appears to be a purchase based on the Settlement Statement. The LLC borrowed the money and gave the money to the individuals.

Is this a purchase or is this not reportable?
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#2154153 - 11/17/17 10:23 PM Re: Reportable or Not?? swiggles
Dan Persfull Online
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Dan Persfull
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Bloomington, IN
However, in the process, they converted the loan to an LLC.

Did they convert the loan to a LLC or did the property ownership convert to a LLC?

If the loan was just made in the LLC's name I don't see this as reportable.

If the property's ownership was transferred to the LLC as part of the loan transaction then I would report as a purchase.
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#2154155 - 11/17/17 10:35 PM Re: Reportable or Not?? swiggles
swiggles Offline
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So sorry......property ownership converted to the LLC. LLC is the borrower and owner. Loan funds went, in cash, to the individuals who were previous owners, but no loan in their names against the property. They do own the LLC.
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#2154225 - 11/20/17 03:30 PM Re: Reportable or Not?? swiggles
hmdagal Online
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Did the title to the property transfer at the time of the loan closing, or was it earlier? If it transferred at closing, your loan would be reported as a purchase. If it transferred earlier, not reportable.

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#2165736 - 02/24/18 05:09 AM Re: Reportable or Not?? swiggles
swiggles Offline
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Ah.....thanks.....transferred at closing.
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