Lender wants to change my LLC structure

[Srini Murthy]

I am trying to close on my second Duplex in OH. I have an Ohio LLC which is pass through to my Wyoming LLC. This second duplex lender says they cannot close on my Ohio LLC with this structure. I did not have any problems when I brought a duplex last year.

Have the rules changed in the last year?

[Doug Smith]

Some lenders will allow layered structures, like you are tryig to do, but many won't. It can limit their ability to come after you in the case of a default, which is why you're doing a layered structure, I'm sure. Keep in mind, the lender likely has stringent restrictions from their funding sources that they have to meet and, in most I've seen, layered ownership structures are no allowed. I wish you well and hope you can work this out, but you might just have to buy it in an LLC with only one layer, meaning you directly own it.