Refinancing a Property Titled to an LLC - Posted by Landis Whitehurst

Posted by ib on October 07, 2000 at 15:07:38:

I know I wasn’t asked but my accountant informed me that if I was to put one of my houses under my name, I wouldn’t be protected from any liability. Let’s say someone trips in front of my home and breaks an ankle. They can actually sue me as opposed to my LLC and possibly have access to my personal assets.

Refinancing a Property Titled to an LLC - Posted by Landis Whitehurst

Posted by Landis Whitehurst on October 04, 2000 at 10:39:47:

Are there any lenders out there who will allow a refinance on a property titled to an LLC? My father and I have been in title for over a year to a property in the name of our LLC. We are a few weeks from finishing rehab of the building and are looking to refinance to get back out of it the money we put in to it. It is a 4-unit building and comps in the area are $120k. Our purchase and rehab costs are $60k. We’re just looking for a loan of 50%-60% LTV to get back what we put into it, so we can move on to another project. The problem I have encountered so far is that the lenders I have spoken to want the building to be titled in my personal name in order to cash out.

Any suggestions?

Re: Refinancing a Property Titled to an LLC - Posted by Ed Garcia

Posted by Ed Garcia on October 05, 2000 at 10:00:43:


I just got through answering a similar question below that was titled, Transferring Funds Among Companies.

Your situation is a common one. I’ve heard this over and over again about how investors are having a problem in having lenders accept their Corporations or LLC as a purchasing entity. I think that it’s funny how we set up LLC or Corp’s to shield ourselves and then expect people to want to do business with them. The Bank or lenders are no fool, they know what were doing, they realize were hiding behind these shields, so what are they expected to say, OK, if something goes wrong with the deal, I know that you’re outta here.

Landis, I’m sure you know that the problem in setting up a NEW Corp. or LLC is just that, it’s NEW. It has no income, no assets, no credit history or track record. It’s like a person who is starting out for the first time with nothing backing them up. However, if someone starts a Corp. or LLC and continues to operate it, developing credit in it, a constant income stream, and assets, it now has established it’s self as a CREDIBLE entity.

My suggestion when starting out, with your first few deals, is to tell your lenders that you want to put your loans in your Corporation or LLC and personally guarantee them. A Bank will have no problem with this. A mortgage co. may, so in that case tell them you want to put the loan in the Corp’s. or LLC’s name with you co-signing for them.

By doing it in this manner, you are now properly setting up your Corp, or LLC to be it’s own entity. After a few years, you then can do future deals with just your Corp. or LLC because it will have it own identity as far as being a qualified borrower. It will have income from the properties that it holds, it will have credit from paying the loans on those properties, it will have assets based on the equity position of those properties and any office equipment that you might have decided to put into or purchase with that entity etc.

After saying this, I’m aware that many of us set up LLC’s or Corp’s for various individual properties. Unfortunately, in doing so, the principles will always have to sign personally or take the loan down in their name.

Ed Garcia

Ditto—I have the same problem! (NT) - Posted by Bill Scott

Posted by Bill Scott on October 04, 2000 at 21:20:25:

So, now what?

Can an LLC be owned by another LLC? - Posted by Derek Crager

Posted by Derek Crager on October 28, 2000 at 07:12:54:

Can an LLC be owned by another LLC?

Re: Refinancing a Property Titled to an LLC - Posted by DavidV

Posted by DavidV on October 12, 2000 at 22:48:26:

Ed, what kind of interest rate (i’ve got around 750 credit) would there be refinancing in your name as oppossed to a corp. if i guarentee the loan personally? Also what kind of ltv programs do you have for refis from a working credit line to hold in a corp (to sell cotract for deed)?

Thank you

Re: Refinancing a Property Titled to an LLC - Posted by Landis Whitehurst

Posted by Landis Whitehurst on October 08, 2000 at 17:36:35:

Thanks for the answer, Ed. I had seen that post and that is what my plan was, to personally guarantee the loan to help develop a credit history for the LLC. I got in contact with a mortgage broker here who said he has relationships with lenders who will let me refinance in the LLC’s name as long as I personally guarantee the loan.


Re: Refinancing a Property Titled to an LLC - Posted by Johnny Bolton

Posted by Johnny Bolton on October 06, 2000 at 16:09:01:

What about the case where the LLC has 50-70% equity in a property in an up market?

My LLC bought & sold a property all cash & would now like to by a $350,000 property (rental) with $175,000 down. Would a lender take that deal?

Another Idea? - Posted by Denise

Posted by Denise on October 05, 2000 at 15:28:56:


When first starting out, what do you think of making the first few deals in MY name; while keeping a separate checking account, and then when there are assets, etc. transferring them into the corporation?

The reason I was advised to do it this way, is that since I’ll have to personally guarantee everything anyway, it can save newbies (like me) $ setting up the corp, filing separate taxes, etc, until there is a cash balance to cover these ongoing expenses.

(Of course, I have to carefully maintain records, but I would do that anyway.)


No Problem with the Right Deal Structure - Posted by Michael Morrongiello

Posted by Michael Morrongiello on October 10, 2000 at 19:12:02:

If you structure your deal where the property seller agrees to sell to your LLC and to finance your LLC and then understands that they will be able to immediatly convert their seller financed 1st lien into CASH at the time of closing, with the type of down payment you have indicated, I see no reason why we could not do a deal this way.

I would have NO Problem with you taking title in your LLC’s name and also executing the note that way.

NOTE: the down payment funds would have to be clearly documented.

See if you can make your purchase come together in that fashion.

To your success,

Michael Morrongiello