@Christine Watson
Its common for investors to purchase with a brand new LLC. You would normally write the purchase contract with the buyer to be "Christine Watson or an entity to be formed" so you can form the entity after you have your offer accepted. You would be personally guaranteeing the loan, but the loan would still be in the LLC's name. Talk to commercial lenders and you will find that you can do it...
However, the matter of piercing the corporate veil is a complicated on. Of course, consult some qualified professionals.. But, its a "facts and circumstances" thing that isn't easly answered, as many "little" actions can add up to piercing the corporate veil. Furthermore, as we have found on BP, very few to nearly none of the investors have been sued so there really hasn't been "test" of their actions...
For example, MANY investors quit claim deed the Title. however, in my layman's opinion that I keep mentioning which nobody seems to want to refute is how does this quit claim deeding, especially if you make a habit of it. Remember, you can't use the LLC as an alter-ego. It is a legal entity, just like another person. So you need to consider it like a stranger -- would you quit claim deed your property to a stranger? Would you expect that stranger to rent it out for you and make your payments? At the very least you'd have to generate more paper to make it more legal, just like the recommendation to have periodic meeting minutes, etc. when having your own LLC. Not havnig them won't "break you," but it could help...
Also, with the mortgage in your name but Title in the LLC, which bank account will you draft the payments?? People pretty always respond "from the LLC's of course!" However, if you are keeping your personal and business accounting separate and not co-mingling your funds, why is the LLC paying your personal mortgage? Why is the LLC claiming the interest deduction on your tax return (probably on SchE of your return, instead of having to itemize if it was a personal mortgage).
This is why many of us on BP recommend not using a LLC for residential long term holds. Rarely if ever are landlords sued.. As I mentioned, there aren't really any examples in BP. While certainly the LLC can be useful for the limited liability protection, but it will cost you. Meanwhile, most people don't want to pay for the cost, normally the big one is the financing. There have been posts on BP where investors started down the road of the LLC, got all fouled up, and regretting it posting that if they had to do it all over again they wouldn't have used the LLC at all.
