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Old 07-15-2012, 07:23 AM
 
5 posts, read 6,973 times
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We are doing a start-up business for real estate, mainly buying properties (albeit distressed or not), getting them into rental condition, and renting them out. When it comes to lending, are lenders more or less (or not at all) concerned lending to a LLC? or would they rather lend just to individuals specifically and not to the entity?

Any insight will be helpful.
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Old 07-15-2012, 07:44 AM
 
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You will not be able to use the LLC to secure a normal loan in today's market. If your personal finances are OK you may be able to secure a loan in your own name.

It is matter of simple legal recourse. You personally will have a whole lot more incentive to make good on the loan committments. The LLC can be killed off and the bank left holding a bag o' nothing...
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Old 07-15-2012, 08:51 AM
 
Location: The Triad (NC)
26,847 posts, read 57,851,863 times
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Quote:
Originally Posted by Our Buddy Beaker View Post
We are doing a start-up business for real estate, mainly buying properties...
Who is this "we" you speak of Kimosabe?
If you mean partners... then you need a solid partnership contract and Umbrella insurance...
and NOT under any circumstance an LLC or any sort or kind.
Quote:
Any insight will be helpful.
Avoid having partners.
Still no LLC and still have Umbrella insurance.
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Old 07-15-2012, 04:01 PM
 
5 posts, read 6,973 times
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Thank you both for your response.

"We", as defined: as two business collegues, not related, looking to go investing of what was described above, and would most likely, to mitigate risk, require both of our involvements and not go in it alone.

@chet, what do other LLCs (outside real estate) do to obtain investment or business loans? Or is the comment strictly based on real estate investing?


@Mr. Rational
The umbrella inurance would be taken in our personal names?

A partnership agreement, we concur with, but if not LLC or any sort of kind, then is just a personal partnership agreement? and not a formal operating agreement for a LLC, etc?

Isn't the reason to use a LLC to mitigate personal risk, but still be able to use your "name" to acquire funding?

Again, thank you for your help.
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Old 07-15-2012, 04:25 PM
 
Location: Salem, OR
13,741 posts, read 31,556,293 times
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You'll want to talk to a local bank...hopefully one you have done personal business with for a long time. Most real estate developers and investors are LLC's in my area, and they are use local lenders as the biggies aren't going to lend to you, most likely. I think a lot depends on what is normal for your area in terms of corporations. LLC's are very, very common in my state.
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