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    3 Replies Latest reply on Jan 1, 2009 11:17 AM by dublincpa

    Bank Financing for LLC

    buddylove Newbie
      Hi All,

      I setup an LLC with the intention of having the entity purchase real estate for rental income/investment. Will
      a bank lend to a new LLC with no income history? I can afford the rental property payments easily from my
      personal income (assuming no rental income), but I have read in several books that real estate should be
      purchased through an LLC to protect my personal assets against lawsuits.

      How can I use my personal income to support the financing of the LLC without "peircing the corporate veil"
      that would open my personal assets open to unlikely, but possible lawsuits.

      Thanks,

      Louis
      Dallas, Texas
        • Re: Bank Financing for LLC
          LUCKIEST Guide
          Bank Financing for LLC, Welcome Louis

          You need an Accountant and maybe a Lawyer (If you are talking lawsuits)

          Good luck, LUCKIEST
          • Re: Bank Financing for LLC
            buddylove Newbie
            I have both, but neither can secure bank financing.
            • Re: Bank Financing for LLC
              dublincpa Scout
              I am NOT an attorney. I am not giving legal advice, just sharing my limited understanding of a few things.

              Unless you have a HUGE downpayment, nobody will lend to you without a personal guarantee. If you have an adequate down payment and the cash flow on the property is sufficient after accounting for vacancy usually 10%-25% depending on the property and lender, then you might be able to pass on the guarantee. Nowadays I am not certain.

              That said. Without the downstroke and sufficient cash flow on the property, you will likely need a personal guarantee. Then your personal income would be taken into account. CHECK THE FOLLOWING WITH YOUR ATTORNEY - A personal guarantee on financing probably would not pierce the liability shield for anyone but the lender in the event of a default. There are some environmental issues among other things that no legal form can shield you from.

              Good luck.