First property -- getting mortgage for LLC?

[M Ness]

My partner and I are getting ready to purchase our first property. We will be forming an LLC with both of us as members for liability purposes as well as for structuring our business relationship. In keeping with maximizing the liability protection of the LLC and minimizing the risk of veil piercing, I'd like to mortgage to be in the name of the LLC. Obviously, though, the LLC will be new and will have no assets. My partner and I are both prepared to personally guarantee it on the loan application.

How should we go about this? Should we form the LLC first and then apply for a mortgage as the LLC with us as personal guarantors? Or should we apply just as co-borrowers and leave the LLC out of it for now? What is the norm?

Thank you for the help!

[Nathan Emmert]

You can always hide that transfer inside of a Land Trust. Transferring it to a Land Trust does not trigger the Due on Sale clause by law... and once inside the Land Trust, transferring the ownership interest of the Trust is not a recordable action (bank never sees it).