Tax Liens & Hard Money/ Private Lenders

[Bill Newport]

Hello All,

I have been running into a small issue and wanted to get some feed back to see if anyone new a way around this. I have a small tax lien that is against me personally. I will be paid off completely in the next few months, but this does not help me today. I know some hard money lenders/ private lenders will not lend to me until this is cleared up.

My question is if I am using and LLC. or Corp. to purchase the property will this issue still apply? If so, any suggestion to get around this would be greatly appreciated. (aside from the obvious of paying off the tax lien).... Thank you...

[Frank Uzzi]

Bill,

If you use a corporate entity to purchase and are doing the purchase with private money, it most likely will not solve your problem. Most hard money lenders will require a personal guarantee and run the credit on the guarantor. If you are not borrowing funds it won't show up in a title search because the lien is not against the entity but only against you. Still, I would payoff the lien and make that your priority. Although for investing purposes it's not the best idea you can try to kill 2 birds with 1 stone if there is enough equity in property, you can borrow the additional funds and payoff the lien at the closing. This will give the hard money lender peace of mind that the lien is gone.