Making an offer/closing a deal with an LLC-basic questions

[Annie Bollini]

Hi - I'm setting up an LLC with a friend partner and looking at multiunit residentials in Maryland. I've looked at the forum posts on LLCs and do not see answers to these very basic questions. One potentially relevant detail is that my partner will secure the loan (not commercial b/c 4 units or fewer) in her name.

Once we set up the LLC, do we write the offer using the LLC?

Once we purchase, do we use a quitclaim deed (since the loan would be in her name) to sign the deed over to the LLC?

Do we get insurance in the LLC name?

Can anyone share their Articles of Incorporation or refer me to a good example? Want to be sure ours is solid.

Thanks for any advice.

Annie

[Marc Winter]

@annie bolinni,

You are correct, these are all very basic questions. But the main issue you have not addressed is the fact that even if you do QC the deed to the LLC, your friend/partner will still be totally, completely and solely on the hook for the mortgage and note.

If things go sideways, it will be her ASSets on the line, not yours nor the LLC's.

OK, for the other questions: 1. If she is taking title and doing the loan, you would NOT make offers in the LLC's name, rather offers and title all are on her. 2. Your original insurance will be in her name, then once the title is transferred to the LLC, a new policy will need to be written naming the LLC--the insurance must follow the titleholder.

3.  Asking to look at someone else's articles of incorporation is, imo, a mistake.  Speak to your attorney for that kind of legal advice if you are serious about making this a real business with a sound footing.  

4. (Not your question, rather mine): Do you really need an LLC at this point? Shouldn't a well-constructed partnership agreement spelling out your business relationship come before an LLC? Take out a large umbrella policy to cover contingencies; if/when you find some success, then go for the LLCs or other title-holding entity.

Good luck to you on your adventure.