Loaning an LLC Money

[Lisa Dawson]

We are in the process of buying a four-plex and have set-up and LLC to purchase the property.

My wife and I are going in with another couple and are going to be equal partners.  

This is not our first property, however this our first property inside of an LLC. As you know getting loan to a new LLC is next to impossible. We have taken out personal loans and are using those proceeds to purchase the property.

We are all bringing cash to the deal, however we desire to set this up through 20% capital and 80% loan collateralized with the property.

I was under the impression that we can set up a mortgage at the time of closing and register it with the state. 

We will have liability up to 1M on the property.

My questions stem from loan/Asset Protection.

• If we were sued, and for the sake of this discussion we are sued and lose $2m, would we only lose our $1m (insurance proceeds) and 20% capital (assuming we have to sell the property).  Said another way would the portion of the loan be able to be recovered by us?
• Setting up a the loan? Does setting up a mortgage rather than a loan to the LLC offer us more protection?
  • Can we setup a mortgage to the LLC identifying two or four different individuals as the payee or do we need to set-up separate LLC to handle distribution to and from?
  • Do we have to set-up the mortgage on day one or can we do that after close?