No Contract Yet, Received Some Money, Recently Formed LLC

[Aaron Van Curen]

I'll try to keep this as short as possible. I recently got two properties under contract under my name. I have a private lender who issued a certified check under my name (directly from HIS account) to pay for the earnest money. I created a LLC shortly after and was hoping to close with it, however, the my agent says per the contract that I have to close in my name...okay fine. I plan to continue as we have been and have the private lender issued a certified check in my name directly from his account to pay for the properties. I want to transfer the properties into my LLC the same day I close which is not a problem. The problem arises when it comes to creating a paper trail for my LLC for the money that was loaned and how to create the contract. Should I create the contract between the LLC and the private lender once the properties are transferred and how do I prove the funds were received by the LLC or that the LLC owes the private lender if the money was given directly from the private lenders account in my name to the escrow agent. I am just very confused on how I should go about creating a paper trail for the private loan so that it goes through the LLC and not my name.

[Ralph R.]

@Aaron Van Curen actually some lenders prefer to loan to LLC's most portfolio lenders lend to LLC's all the time. its the conventional lenders that are restricted to lending to private individuals only.

@Account Closed is correct tho. its better to get a good umbrella policy than put 1 or 2 properties in an LLC. you still need the Umbrella even after its in the LLC. in my case I need 2, one for the LLC and one for me personally. if you have a car accident and somebody sues you the LLC is your asset. if its a sole ownership then I BELIEVE (not a lawyer so im not 100% sure) they can get the assets in the LLC since its part of your assets. for my part that's a more likely scenario than a tenant suing you for slipping on the sidewalk in one of your rentals. (in that case they have to sue the LLC.) which is gonna be worth more the LLC or your personal finances? remember they can only get a dollar value equal to the part of any houses that you own. in your situation that doesn't include the part your private lender has a lien against. worst thing they can do is force you to sell, pay off the lender and turn over the remainder of the proceeds. an Umbrella protects you to a greater extent and most provide a lawyer to defend the suit. then your private assets pale in comparison making you the smaller target. if your a lawyer looking for the most money you do the insurance company first. In short you need the Umbrella policy LLC or not. probably 2 Umbrellas with the LLC. RR