Posted by Tim on May 15, 2004 at 19:21:36:
If I lend money to a C Corp for the purposes of rehabbing and selling homes can I use the UCC-1 financing staement form and record it in the land records to create a lien against the properties? Would this protect me from a judgement creditor taking my equity in these homes. On the UCC-1 form, item 4 ask you to list the collateral which would be the addresses of the homes and item 6 says to check off if the form is to be recorded in the “REAL ESTATE RECORDS.”
Controlled equity stripping? - Posted by FBN
Posted by FBN on May 15, 2004 at 19:11:29:
Would this scenario work:
Move real estate into an LLC #1. Create another LLC #2. LLC #2 borrows money from me to make one or more mortgage loans to LLC #1 that is equal or greater than equity in the real estate owned by LLC #1. The mortgage is recorded. LLC #1 then distributes the borrowed cash to its owner (me) who then uses the cash to pay back the underlying loan (indirectly). There are no monthly payments required on the mortgage,and no bookeeping or tax returns for LLC #2. I have therefore protected all equity in real estate from creditors. Would this work if I used a corporation for dealer properties (rehab houses to be sold retail) Any comments? How about corporation filing a UCC-1 instead of recording a mortgage to avoid recording fees?
Can the legal brains here comment? - Posted by FBN
Posted by FBN on May 17, 2004 at 17:26:26:
n/t