All Forum Posts by: Ronald Rohde

@Ronald Rohde I'm a little scared here. Can you please elaborate? I would like to know how what I said might have been inadvertently illegal or unethical. I am not in the business of attempting to promote illegal or unethical behavior, and to my knowledge, never have intentionally done that. What exactly in my comment is illegal/unethical? 

@John West I've fired several lawyers over this issue. For some reason, people are unable to understand that I can't get conventional financing on 30 year terms if the property is owned by an LLC. I can absolutely go to a private, non-conventional lender and get whatever terms I work out between with that individual or private business. But, generally speaking, the interest rate, and therefore the cash flow and overall financial picture around a given property will be impacted negatively if I choose to put the property in an LLC and get a non-conventional loan.

Additionally, if I move my property into LLC after financing with a conventional loan, I will be in direct violation of the due on sale clause. I feel that the risk of them calling the note due in a high-interest rate environment in several years is far greater than the risk of a catastrophic lawsuit that my insurance does not cover. That's my personal choice.

This is why I do not use LLCs at my stage.

After I have accumulated significant assets ($1m+) perhaps I will begin moving all of my properties into LLCs and sacrificing cash flow and terms for additional asset protection. But for now, I feel that in my situation, the advantages of excellent long-term financing at great low rates (especially in today's interest rate environment) outweigh the unlikely event that I get sued for an amount that would bankrupt me. I also have insurance to protect me from that. 

I'm very tired of hearing advice from folks that are not in my stage of investing telling me that an LLC is a must-have. An LLC is great, and I will use them, just not quite yet at a still low level of net worth (less than $1M), and while the party is going on with great financing options. The folks that ARE in my stage of investing, or built wealth the way that I am building it, tend to agree with me, but perhaps we will see continued debate about this topic going forward.