LLC / Due on Sale clause

[Mark Douglas]

How do you purchase a property in an LLC if banks aren't very willing to do that? Does it just have to be an established LLC, showing consistent income for "x" years?

Do most investors take the risk of purchasing in their names and transferring it later?

Thanks !

[John Thedford]

@Mark Douglas

Each bank will have their own guidelines for lending to an LLC. Many investors do take title in their name and transfer it but there can be tax consequences as well as being called on the note. If your sole reason is liability, a good policy will cover you. Others with a legal background may chime in on your question. I don't deal with banks at all due to mountains of paperwork etc but rely instead on private money if I need funds for purchase. That saves a lot of time, gets around problems, and allows me to take title any way desired. Last but not least, some states have court rulings regarding single member LLC's that basically makes them a disregarded entity in the event of litigation.