Obtaining loans under a LLC

[Navid A.]

Good Evening BP!

I talked to my lawyer today to finally set up a LLC to add another layer of protection against liability. My concern now is, how difficult is it to obtain a loan from the bank under a LLC versus under my own personal name? My lawyer advised me that it will be harder buying a property under the LLC. He said I could also purchase a property and later transfer the deed over to the LLC with a $150 fee. How do you guys do it? Any tips or suggestions? I don't have deep pockets to fund all my properties with cash and will have to rely on financing in order to expand.

Thanks in advance,

Navid

[Anthony Dooley]

@Navid A. I learned this in a real estate seminar from an attorney on the subject of asset protection. Even if your property is held in an LLC, you own the LLC. So, if you kill someone in a drunk driving accident, get sued, and lose, all of your assets are at risk including your LLCs because they are owned by you. Holding property in an irrevocable trust is safer and holding property inside an LLC that is owned by the trust is better. The amount of layers would be determined by your net worth. If you are broke, then you don't need any of this. Having insurance is the first layer of protection with a maxed out liability policy. You don't need $1million in coverage if your net worth is only $100K. An umbrella policy was designed to protect your assets once you have some. I suggest you talk to an estate planning attorney to see what is best for you at this point in your wealth building, but be knowledgeable and don't get sold products you don't need.