How To Properly Protect Properties With Mortgages?
I have a few properties that are currently held in my name, and one that's held in an LLC & my name. The property that's held in both my name and LLC, I've had a difficult time refinancing and may have to remove the LLC from title.
I've read lots about Land Trusts, but saw John Locke say that a diligent attorney or bondsman can easily find out who owns the property. Additionally, if I have a mortage on the property and quit claim the deed to my company, file it, won't the mortgage company be red flagged? Can they then call the loan due?
Thanks for any help you can throw my way.
Cree
[addsig]
Yes its almost impossible to refinance a LLC property for obviuos reasons. Their is no liability, as the primary borrower is hidden behind the premise of no or limited liability. I am a mortgage broker in Florida and had a Dr buying a property in Manhattan attempt to have it financed as or udner a LLC. This can be done, in his case, because it was a mixed use property. However as residential only its very difficult. Even for commecial to be financed in this manner, property has to be strong, in terms of lease or in terms of loan to value, ie. so bank gets its money even LLC doesnt pay its bill.
Thanks
Kelly Bigham
Nations Mortgage
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888-458-0115
Thanks for the info.
If the property is refinanced in my individual name, then after the refi can I put it into an LLC? The note would still be in my individual name, and thus make me liable for the debt.
If I did quit claim the deed to the LLC, would that be reported to the mortgagee? If so, could they call the loan due?
So back to my question, how do I properly protect my assets?
Thanks!
Maybe I'm missing something, but I don't see why we should have so much trouble getting a loan for our LLC or corp. I understand that the loaner needs to have someone to come after for the money if the loan isn't paid. But it seems to me that we should be able to simply *co-sign* personally for the loan. If a corp is legally considered a "person", and we can co-sign loans for other people, why not for a corp?
Is it just that bankers, etc are just unimaginative? Oh, yea. They are.
[addsig]
I just spoke to an r.e. attorney who said that holding a property in an LLC is only good if you don't plan on refinancing, or taking out a home equity loan. Said they NYS bankers also frown on Land Trusts. Said the easiest way to protect one's properties is to get all your properties with one insurance agent to get the best deal and then get an Umbrella Policy for protection.
He also said that re: Subject to - that if you plan on selling quickly it's no problem, but it's better to refi with a bank the new property if you hold it. Any thoughts?
I have recently looked into this myself and can just tell you what I have sumized. Please anyone correct when I go a stray
1) the only asset protection that land trusts provide is that you can more easily hide the "owner". this will only work if the owner is not the trustee and the owner does not use the their regular easy to find legal name as the beneficiary. (land trusts do provide chain of title benefits, which can help you change owners - but that is another slightly different story)
2) LLC provide liability protection, as do other forms of corporations. but be careful to keep your LLC seperate from yourself. In another words, after you set up the LLC properly maintain the LLC and sign all documents as the LLC. Just because you are an LLC does not mean that you can not get sued personally for neglience - anything can happen in this crazy suit happy world.
3) Liaiblty protection on your insurance policy provides coverage to defend you in case that you are sued. Up your liability limities on all your properties (it is very cheap) and protect each property with the proper insurance.
4) umbrella policities provide coverage for your properties - but the policies are very hard to get. If you have auto and home owners with a company you will probably be able to also get an umbrella policy. I am just now getting mine with state farm. A SF personal umbrella must have 300k underlying liability on each property and you can not have more than 4 investment properties. Commercial umbrella policies require 500k of underlying liabilty. Well, nobody will write a hazard policy with 500k so I had to get extra liaiblity from SF on each of my properties. It has been a pain in the arse. Additionally, the policy is just for a single entity - yourself or your LLC, not both.
I decided to hold all my properties that I intend on selling within 12 months in an LLC. I have not tried it yet, but Washington Mutual says that they will mortgage or refinance properties with LLC on title. Any properties that I intend to keep more than 12 months I have my own name on title, have 500k of liability, and are covered by my commercial umbrella.
Brenda