Expert: Dick Dennis - 11/24/2008

Question
QUESTION: How can I buy a home in my business name? I have a software consulting company, personally I have very good credit (700s and trending up), and currently own a house that I occupy.  I am considering either renting my current home or renting the new I purchase in the business name. The new home will either be a townhouse in the $400k range or a single family home in the $650 range in midtown Atlanta area. My main questions are around the procedure for purchasing the home in my business name. What are the benefits of doing this? Thanks for all your time.

ANSWER: It sounds like you really need a business attorney, Nikki. This person would suggest perhaps a corporation to own your property. You would then rent the property from your corporation, and your corporation would then report the rental income as per usual. That's just to start. To finish this up, you really should consult with a business attorney. No Realtor could or should advise you, unless that person is an attorney, in this matter as long as your intent is to own the property in a business name. I do wish you well.

Dick Dennis

---------- FOLLOW-UP ----------

QUESTION: Dick - I am planning on speaking with my Real Estate attorney and CPA.  My questions are more specific to how do I (procedure based) and not whether it's beneficial. I am very concerned with the benefits and consequences, but I seem to not be able to acquire any knowledge on the subject on business purchasing, but rather people's opinions on why I am, why I want to,  or why I should not do this. For instance, I have a C corp if that helps. Is it any different (like the steps to signing the purchase contract, obtaining a loan and closing on the house)?  Perhaps if you do not know the specific steps maybe you could point me to someone who did.  Thanks for all your time Dick and I look forward to your response. Best regards, Nikki

Answer
As long as you already have a C-corp, and it DOES have a credit history, then it might be possible to get a loan under its name. But I really doubt it. Your CPA is going to tell you the same thing. Just go ahead and start the process of purchasing (signing agreement, etc.) and if it turns out that you can indeed put the loan in your c-corp name or business name, then you can (before closing) change the title to that entity by stipulating something like, "Buyer has the right to assign title to xyz company prior to closing." But like I said before, I doubt the lender is going to allow it. After you take title in your name is when you can switch title if you want. The bank is only concerned with having you or the entity with the best credit record to be responsible for the loan.

Dick