Buying Rental Property in Personal Name Instead of LLC?

[Jason Somerville]

My wife and I have been investing in real estate for a couple years now and just formed an LLC. I asked a banker about purchasing a property in the LLCs name and she said if we did that the loan couldn't go to the secondary market and we wouldn't be able to get a fixed 30 year mortgage.

She said that for rental property we should buy the property in our name, lease the property to the LLC and then have the LLC sub-lease it out to the tenant. That way all the rent comes through the LLC and we still have that liability cushion between us and the tenant.

Does anyone else do this and if so, is this a good plan, pros/cons, etc?