Posted by Dastine on October 16, 2003 at 13:14:10:
Thanks much for the reply. I feel much better now. A business associate had warned me about this sort of thing years ago, but I had never really checked into it. I was just worried about setting myself up for any troubles or surprises in the future. I guess they were wrong or there was some sort of misunderstanding.
By the way, thanks much for your book Flipping Properties. It is a big part of what I am trying to do right now. It really helped me get my head on straight about the real estate business and how I wanted to approach it. And, what is really possible.
Corporation and personal guarantees - Posted by Dastine
Posted by Dastine on October 15, 2003 at 17:25:11:
I am working on planning my venture flipping properties, From reading all the great informatin on here I have determined that a corporation will be my best bet for business structure. I have one question on how this will effect my business plan though.
I have very good credit and plan to use that to secure a line fo credit from a bank to be used for interm financing of deals or any rehab costs. I am concerned though that using a personal guarantee on this credit line may weaken the protection afforded the corporation from other outside liabilities. The term I have heard used before was “piercing the corporate veil”.
Re: Corporation and personal guarantees - Posted by Bill Bronchick
Posted by Bill Bronchick on October 16, 2003 at 08:09:57:
The personal guarantee on your credit line has no effect on outside creditors. “Peircing the corporate veil” is a concept wherein a plaintiff asks the court for equitable relief to set aside the corporate structure and go after you personally. The plaintiff must prove lack of corporate formalities, as well as an “equitable” reason, such as “you did something very bad.”