I've got a LLC to hold a property I'm closing on next week. I talked to people and they were split on whether I should do it or not, but I want to have multiple properties, so I went for the safety of it.
Is there anything you wish you'd known when you did your first LLC and property? Any resources out there? I've got a good lawyer doing it, a realtor who's family, and the Nolo books about LLC, and some real estate investing books, but not any good ones about holding properties in an LLC.
I've heard that it's hard to get lenders to refi on a LLC-owned property. What do you do when you want to pull money out?
We had a free and clear property(small mixed use) for a long time and then transferred it to an llc. We actually got sued and we were never individually named in the suit. We had adequate insurance but nice to know we were not at risk. We did do a refi but only took out a small ltv. Only thing that is a pain is having separate accounts and transacting through that.
Loopholes of Real Estate is a great book by Garrett Sutton. I also recommend his books: Start Your Own Corporation and Run Your Own Corporation. I'm going through these now and they have been a tremendous resource for LLC info.
Best of Success!
Personally, I only place commercial /multi's over 5 units into LLCs. Financing them and insuring commercial isn't a problem.
I would ask my lender (if you are obtaining a loan or may refi later) and I would ask my insurance carrier if an LLC changes things for them. If the lender and insurer are ok with it, go for it. It has advantages, especially if not just quitclaiming later.
Is the property you are closing on next week residential or commercial @Judy J. ?
shouldn't be hard to refinance depending on the lender
@Steve Vaughan it's residential, a 3 unit. I didn't know that the insurer might have a question if it's in a LLC - thanks for that info. I will ask them about it.
I have everything in llc's , doing a major consolidation refi, right now. went to banker and talked about consolidation. He came up with some suggestions. Trying to get some payments consolidated and freeing up a few properties.
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