Financing for LLC’s - Posted by Matt
Posted by Matt on October 28, 2003 at 11:57:03:
My father and I have started an LLC for the purpose of investing in real estate. With some modest effort we were able to move the property into the LLC and have it deed accordingly.
We now have 2 issues;
Issue #1: We’re looking to pull some equity out of the first property but the banks are not willing with the property deeded to LLC. We are now forced to seek commercial lenders to get an equity loan.
Issue #2: We are in contract to buy a second property for the LLC and the banks are again not willing to lend directly to the LLC. We are more than willing to add our names to the mortgage and guarantee the loan, but still we face resistance. The deal is now in jeopardy due to these
At this time we are thinking about buying the second property and doing a quit-claim over to the LLC. What are your thoughts on this transaction? After we do this, down the road we?ll once again have trouble pulling out equity do to the property being held by an LLC. Therefore we are going to have to again deal with the above Issue #1.
Are there and tips/strategies to purchasing properties as an LLC and then have an easier time in utilizing the equity in that property down the road? All of the lenders we have spoken to encourage holding the property in our names, but that is obviously just to protect themselves.
Again and help on this issue would be greatly appreciated.