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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.


      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.