All Forum Posts by: George Willey

What are my loan or financing options if I want to pull some money out of my rental property that have titled to my LLC? Bonus points if you can suggest lenders in AZ...

I have done a lot of googling and called a couple of local credit unions and have been hitting a snag when I inform them the property is owned by my LLC (both HELOC and Refi).

Am I really down to hard money loans or business loans from the LLC itself?

0 Votes

Chandler, Arizona

Quote from @Russell Brazil:

Quote from @George Willey:

Congrats on the new property @Jacob Holt!!! Sounds like you already got some solid advice from the other comments..

@Brandon West, This is by no means legal advice - but my lawyer in AZ who helped me setup my LLC for my rental property told me to just reissue the title w/ the county recorder in the name of the LLC, update Title Insurance to reflect the LLC, and not notify the lender. That was 4 or 5 months ago and no issue from the lender yet (Fingers crossed). I had to ask him about 3-4 times this was ok cause I was terrified of the Due on Sale clause, he cited in the thousands of LLC's for real estate he has setup, he has never seen a lender call the debt due. Hope that helps.

So what is your point of the LLC? Is it liability protection? How hard do you think it will be to pierce the corporate veil when the property is owned by the LLC, but the mortgage is in your own name?

Let's throw another wrinkle into this too.....your lender hasnt been notified and used the due on sale clause because your insurance likely reflects you personally as the owner. So that means the owner of the property, the LLC is likely uninsured altogether. If you had switched the insurance, then your lender would be notified.

So what happens when the tenant breaks their leg, and starts suing. The owner of the property is completely uninsured, the corporate veil is easily pierced.....and now your potentially personally liable and uninsured for this problem.

Seems like that LLC to limit your liability, because it was done improperly, actually created huge amounts of liability for you.

Hi @Russell Brazil, The insurance policy was updated to reflect the LLC and is paid from the LLC, this was the advice I received. I sure hope the lawyer I consulted is not steering me wrong here. So the Title and Insurance is in the LLC's name, only the mortgage is in mine. I can understand the mortgage being in my name is not great for the fact of piercing the company veil issue you mentioned, I wasnt aware of any other options being that I cannot payoff or refi the loan in the LLC's name as the current rate is low and the numbers wouldnt make sense if I refied. Happy to hear other options or how this should have been done initially.

0 Votes

Congrats on the new property @Jacob Holt!!! Sounds like you already got some solid advice from the other comments..

0 Votes

@Marisa Voelkel, Do you anticipate any issues acquiring loans for a new property under the new LLC structure? I have 2 rentals (1 already in an llc and 1 being put in now), I am at the point of starting to look at getting a 3rd rental and have always wondered what loan approval will look like with my assets now segmented and if I would apply for the loan as the LLC. Any experience you can share would be greatly appreciated.

0 Votes

Madison, Wisconsin

Nice work....when budgeting for the project, did you scope it by estimated rehab per unit?

0 Votes

All Forum Posts by: George Willey

George Willey has started 1 posts and replied 5 times.

Post: Equity Options for Property in an LLC

Post: House Hacking LLC

Post: House Hacking LLC

Post: LLC for one or LLC for all

Post: First Multifamily Project Successful!!