Important Notice: Our web hosting provider recently started charging us for additional visits, which was unexpected. In response, we're seeking donations. Depending on the situation, we may explore different monetization options for our Community and Expert Contributors. It's crucial to provide more returns for their expertise and offer more Expert Validated Answers or AI Validated Answers. Learn more about our hosting issue here.

Can my LLC borrow funds to finance a real estate purchase?

April 26, 2017borrow Finance funds LLC purchase Real Estate

0

Posted

Can my LLC borrow funds to finance a real estate purchase?

1 Answer

0

Posted

Yes, but only with the use of a non-recourse promissory note issued by a lending institution or by the seller of the property. The non-recourse promissory note cannot be personally guaranteed, and the lending institution can only look to the property securing the note as collateral. Important: Debt-financed property may generate Unrelated Business Taxable Income (“UBTI”), and any taxes due must be paid by the account. For more information regarding UBTI, please consult your tax advisor.