Lending to an LLC or to individual

[Jon S.]

My local credit union bank officer informed me that they cannot lend to an LLC, unless I go through commercial lending, which will have higher rates, and may be tougher to get approved because I do not have 2 years of business income tax returns. Therefore, they suggested I leave my rental in my name, get the refinance done, and then transfer the property into the LLC. Only I don't think that is possible, once the loan is in my personal name, the lender will be first on the lien, and I don't think ownership can change to an LLC without the lender being paid off in full. How does this work, can it work? Thanks

[Nick Doria]

@ rob

You can lose your buildings if you ever get into a lawsuit. If each building is separated by an LLC for each then if something was to happen personally they can't go after you building since it isn't in your name. Another reason is if something were to happen at one of your buildings if they're not protected they can go after all of the buildings versus just the one where the problem came from.