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LLC - Real Estate Loan

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psebastian

Junior Member
What is the name of your state? PA
I am purchasing an investment property and I would like to have it under the LLC name. It seems next to impossible to get a real estate loan under the LLC. One Bank said that I could Deed it to the LLC but I would have to personally sign for the loan. Wouldn't that make putting the loan in the LLC useless and still be personally sued? For example, if some fell on the property. They would be able to still sue the LLC and Myself?

How do I get the coverage under the LLC?

Or am I going to have to get the loan personally and just take out a ridiculous amount of liability insurance?

Thanks
 


oldman9

Junior Member
Wouldn't that make putting the loan in the LLC useless and still be personally sued?
One Bank is correct: you must get the loan personally signed by a natural person, unless the LLC has been in business for a long time.

No, personally-guaranteed loans do not make the LLC useless. You can't be personally sued unless they can pierce the corporate veil.

Or am I going to have to get the loan personally and just take out a ridiculous amount of liability insurance?
Yes, you still need the liability insurance, but not a "ridiculous amount," only what you need.
 

DStaub

Member
The process that the bank described is what almost every bank would require. They don't care if you operate the property through an LLC once their loan and mortgage are in place; they just want to make sure that you are personally liable on the loan. As to any other creditor, the fact that you momentarily owned the property in your own name should make no difference in your liability.

As to your personal liability, an LLC is never a complete shield. Take a look at "How Limited is Limited Liability" at http://www.limitedliabilitycompanycenter.com/how_limited_is_limited_liability.html . Make sure that you have adequate personal coverage, either as an additional insured or under your own umbrella policy.
 

HomeGuru

Senior Member
What is the name of your state? PA
I am purchasing an investment property and I would like to have it under the LLC name. It seems next to impossible to get a real estate loan under the LLC. One Bank said that I could Deed it to the LLC but I would have to personally sign for the loan. Wouldn't that make putting the loan in the LLC useless and still be personally sued? For example, if some fell on the property. They would be able to still sue the LLC and Myself?

How do I get the coverage under the LLC?

Or am I going to have to get the loan personally and just take out a ridiculous amount of liability insurance?

Thanks
**A: the insurance would be for the most part the same regardless of the titleholder.
 

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