Updated almost 2 years ago on . Most recent reply
Financing for New Properties in a Seperate Newly-Formed LLC
Hey There!
After browsing various threads on the subject there is one question that remains when it comes to financing and asset protection.
I realize that you would have to get a non-conventional loan if you are buying the property under an LLC. Now if you form a new corporation for each property purchased prior to getting the loan financed, how would the bank approve the loan without prior history on that specific new corporation? If you create a new company for each property you buy wouldn't financing be extremely difficult considering you are starting off with a fresh slate?
I image alternative could be buying under a company with already-present assets and than transferring it to a newly-formed LLC afterwards? But that might prove difficult under typical loan terms.
Anyone has any advice in regards to this?
Most Popular Reply
A different way...
Our CPA advised us to set up a C-Corp which is the "manager" for a Texas series LLC. The C-Corp has the funds and the credit report, and the longevity. Each cell in the LLC holds one property. The C-Corp "lends" money to each cell to buy a property. Each series books a loan from the C-Corp that it pays off. These are more paper transactions than actual loans. We file K-1s for each cell at tax time.
Talk with *your* CPA and see what they advise!