To LLC or Not to LLC. What Gives?

[Michael B.]

So, as someone new to REI, the whole LLC vs not LLC debate is a bit confusing. I believe I heard @Brandon Turner say on a podcast that he basically did a different LLC for each group or partnership if you will. So, if he and his dad partnered, that would be an LLC. He and his wife partnered, that would be an LLC, and so on.

LLCs sound great. I've setup a couple of them for other businesses. Then I learn that it can be a challenge or that lenders typically don't loan to an LLC. Ok, purchase it in your name, then transfer to LLC. But, then the lender can call the loan.

Why isn't there a simplified way to get a property under the ownership of an LLC? It seems like buying directly under the LLC doesn't work well and transferring to an LLC has some major risks.

What gives?

[Brian Wilson]

From what I've heard most investors haven't had issues with the note being called on properties transferred into an LLC. However, I could see (speculation) that if you acquired a property via owner occupied and transferred it into an LLC immediately after you moved out (after 1 year requirement), then you could be more likely to have you note called. At the end of the day your best bet is to just speak with a loan officer at a reputable local bank openly about what you're wanting to do.