Holding and Financing property in LLC ??? - Posted by Don(MD)
Posted by Don(MD) on October 29, 2003 at 06:54:31:
How are you folks managing to hold the property in an LLC ? Because apparently you can’t get a cheap loan in the LLC’s name. All you get is a commercial loan that is much expensive and terms are not that good. Here’s the situation I’m dealing with -
I recently rehabbed a property that was purchased in an LLC and used HML’s money for rehab. Now for (re)financing it, my lender has recommended that I hold it in a personal name and then move it back in LLC in near future (for liability protection).
So, my concerns/questions were -
I have to incur extra overhead to move the property back in my personal name (now) and (later) move it back in LLC ?
There will be a seperate, unrecorded deed that deeds the property from my personal name to my LLC name. This deed will not be recorded in the courthouse and so will be hidden from lender (so that he does not call the loan due) ? So, for public purposes my name will be on the property forever, which I don’t particularly like.
And if something bad happens and someone is out so sue me now, he can’t sue me (personally) since the property is (under the cover) deeded to LLC and LLC is supposed to be sued ? And whenever someone is out to sue me, I go and record this deed (which has been in my closet for years) in the courthouse, so that the person is not suing me but to LLC technically.
Its kinda like a back-door thing here that I’m sensing here, i.e. I move the property back in LLC but do not record it in the courthouse, so I’m hiding it from the lender but I’m protecting myself by (steathily) moving it in LLC.
The other option (that I was told) was to get a loan in the name of LLC which would be a commercial loan and the terms will not be that favorable.
Just wondering how you folks handle this ? I’m just lost and confused, I would greatly appreciate if someone can step-by-step explain me how you guys are handling holding and financing properties in LLC ?