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Entity Vesting
Taking title to a property in the name of a business entity like an LLC or trust instead of a personal name.
Definition
Entity vesting means holding the title of a property in the name of a legal entity such as an LLC, trust, or corporation rather than in the investor's personal name. This is a key component of asset protection because it creates a legal barrier between the property's liabilities and the owner's personal assets. Conventional lenders typically require personal-name vesting, forcing investors to transfer title after closing (which can trigger due-on-sale clauses). Non-QM and DSCR lenders, however, commonly allow entity vesting at closing, making them more attractive for asset-protection-conscious investors.
How This Relates to DSCR Loans
A major advantage of DSCR loans is the ability to vest directly in an LLC at closing. This eliminates the need for a post-closing title transfer and provides asset protection from day one.
Related Terms
LLC
A Limited Liability Company — a business structure that separates personal assets from investment property liability.
Trust
A legal arrangement where a trustee holds property on behalf of beneficiaries, used for estate planning and privacy.
Asset Protection
Legal strategies to shield personal assets from lawsuits, creditors, and liabilities arising from investment properties.
Closing Costs
Fees and expenses paid at the closing of a real estate transaction beyond the purchase price.
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