Posted by Nate(DC) on May 31, 2001 at 15:00:46:
Bruce,
I do not mean to be harsh but the statement “is your L.L.C. a sole proprietorship, partnership, or corporation” shows a lack of understanding. An LLC is none of those things. It is its own type of entity. It has features of a corporation as well as a partnership.
I do not want to pick on you, just want to make sure any newbies reading this do not get the wrong idea.
Cheers,
NT
Cleaning up the credit report - Posted by Tyrone
Posted by Tyrone on May 30, 2001 at 21:53:10:
Hello,
I’m puzzled about a situation, maybe someone can help me out with this…I purchased some properties in my name over the past two years and recently formed an L.L.C. and transferred the titles into it. My concern is that my personal credit reports implies that I’m over extended, although I pay on time and my cashflow is positive. Can anyone help me figure out how to remove the properties from my personal credit report? Thanks.
Re: Cleaning up the credit report - Posted by Tom (GA)
Posted by Tom (GA) on June 06, 2001 at 08:31:44:
If you signed for the mortgages in your name personally, then the items will be reported on your personal credit report.
Transferring the titles into your LLC will have no effect on that.
The loans would have to be formally assumed by your LLC to be removed from your personal credit report.
Most lenders will require a personal guarantee from the owner of a new business before they will extend credit to the business, so formal assumption may not be possible since you would be the guarantor.
But you never know unless you ask.
Read this post regarding building corporate credit.
http://www.real-estate-online.com/wwwboard/messages/30857.html
Re: Cleaning up the credit report - Posted by Bruce Lawson
Posted by Bruce Lawson on May 31, 2001 at 11:03:12:
Hi Tyrone,
What I would do first is take a look at the legal corner of creonline and see if you completed everything you were requried to prior to transferring the properties. Is your L.L.C a sole proprietorship, partnership, or corporation? Each form of business gets reported differently to the credit bureaus. If this turns out to be a reporting error then you can work from there. You can contact me direct if you care to disscuss your situation.
Sincerely,
Bruce Lawson
Re: Cleaning up the credit report - Posted by Nate(DC)
Posted by Nate(DC) on May 31, 2001 at 07:49:32:
Tyrone,
Just because you transferred title to the property into your LLC does not remove you from personal liability on the loans. When you bought the properties you signed on the dotted line to pay back the loans, and that hasn’t changed just because they are titled in your LLC now.
You would need to refinance in the name of the LLC to remove the loans from you personally. However, in all likelihood, that will be difficult, because you will probably need to give a personal guarantee on the loans (even if they’re made to the LLC). You might want to try to find a private lender (who does not report to the credit agencies), or else start using some of the creative techniques on this site to purchase properties without your credit being an issue.
Good luck!
NT