Financing for LLC's - Posted by Matt

Posted by Amendment9 on November 11, 2003 at 07:14:26:

Can someone explain to me exactly how buying as an LLC “limits” one’s liability, especially if - according to the comments in this thread - doing so seems to limit one’s financing options. How is an LLC superior to simply buying more liability insurance as a private owner to protect against unusual or rare property damages or personal injuries to tenants or visitors to the property? Thank you

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
financing issues.

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.


Re: Financing for LLC’s - Posted by Michael Pine

Posted by Michael Pine on October 28, 2003 at 19:45:17:

As long as you sign personally this should be a non-issue. I have done several of these and other then less choices of banks to use there is no difference.

If you need assistance contact me.

Best wishes,

Michael Pine
AIM: Mortgagebroker71

Re: Financing for LLC’s - Posted by mcmuney

Posted by mcmuney on October 28, 2003 at 12:05:22:

I’ve encountered similar issues during my research to create a general partnership. As a result, we still have our properties under the different partners. Once we are final on a loan, it is then that we plan to quit claim the properties over to our partnership.

How did you mange to buy the 1st property under the LLC?