LLCs & Lenders

[Jason Jones]

Hi everyone,

I'm an attorney and full understand the pros/cons of having property in an LLC, but one of the problems we are running into is that lenders are seemingly entirely unwilling to finance properties held by an LLC b/c of the securitization rules, unless of course you get commercial loans, which is not helpful at an early stage. One option is to transfer to an LLC after financing, but my partners and I are not willing to violate the "due on sale" clauses of traditional mortgages by strawman sales to LLC. I'm wondering if anyone has any good points of contact for lenders who are willing to discuss "creative" financing options, whether it be recourse loans to LLCs, well-capitalized LLCs, etc. Whether portfolio lenders or traditional lender, we'd mostly just like to have a conversation about alternatives. Most lenders we encounter are just too old or cranky or stuck in their ways to have thoughtful conversations.

Thanks for any leads.

[Jason Jones]

It doesn't matter if the lender watches you sign the quit claim.  The fact of the matter is that that loan will soon be securitized and sent to another institution that may or may not do the diligence on your title, and it won't be clean if the mortgage says X but reality says Y, even if the originator knew about the change.

Thanks for all the tips.  

I'll check out those points of contact Edward B.  Thanks!