All Forum Posts by: Tran Chau

Do you guys normally stay the entire time? I have a work event nearby that ends at 7:30p. There is a chance I may not stay the entire time, but if I do I'd stop by after it is over. 

Hi all! 

I'm currently looking at an apartment building where the purchase price is around $1.25m. If all goes well, the plan is to purchase the property through an LLC.

I spoke with a commercial lender the other day and he asked for some paperwork to start the process. He then mentioned the bank would ask for a personal guarantee on the loan even though the property will be held by an LLC (with the building and land as collateral). I have a couple of questions.

1. I was under the impression that posting the property as collateral was enough, but from reading the forums, it seems to be typical on loans <$1m for banks to ask for this personal guarantee. Does anyone have experience purchasing an apartment around this price point and only using the property as collateral? 

2. The attractiveness of the LLC to me is for tail risks - for example, if someone slips in the rain in front of the building and becomes paralyzed, then your potential loss from a lawsuit is limited to the value of the property. If you provide a personal guarantee for the loan, does the personal guarantee then essentially remove the limited liability benefit? If so, is there a way to structure this scenario optimally?

I understand that a lawyer will have to comment at the end of the day, but I was hoping to get some initial feedback to start. 

Thanks for reading!