Temp Financing?

Posted By: bOaty

Temp Financing? - 06/19/20 05:42 PM

We have an LLC borrower who is purchasing an SFR on a 1031 exchange and is asking for temp financing. Once the transaction is completed one of the principals from the LLC will change the vesting into his name and seek a traditional mortgage loan.

This seems like it should be temporary financing because it is going to be paid off by another loan but since the borrower will be changing it seems like that would be a whole new purchase.

I'm stumped and haven't seen one like this before.
Posted By: rlcarey

Re: Temp Financing? - 06/19/20 06:56 PM

The loan to the LLC is not going to be replaced by permanent financing to the LLC. It is a short term loan.

Also doesn't really sound kosher to me.
Posted By: bOaty

Re: Temp Financing? - 06/19/20 07:28 PM

I'm not a fan either.

Thanks, Randy.