Is anyone here buying properties with a credit line in your INC’s or LLC’s name. No personal guarantee.
I have been thinking about starting an LLC and then developing credit for the LLC seperate from my own. I realize it wil take some time to make it happen…
There are post here and there advising that lenders don’t generally lend to LLC unless they have been in business for over 2 years… seems that good business credit could be developed faster than 2 years.
Mtn Land:
I’ve been in business less than a year, so maybe this is the issue, but I’ve tried several times to get lines of credit for my LLC without any success. I ended up settling on a credit card with a high limit for my LLC, which was actually surprisingly easy to obtain (go figure). The problem is that anything you do with a new LLC will be personally gaurenteed by you anyway, so it’s not really any different than applying for it by yourself.
In fact, at Bank of America where I do my business banking, I was declined because 1.)they dont give lines of credit to start-ups, and 2.) Real Estate development/investing is considered a risky business venture and they require 2-3 years and $1 mil in revenues before they’ll fund. This was an exact quote!
Let me know if you have better luck,
Dave Gorman
Dave,
Thank you for your response.
Sounds like even after you have been in business for a while your bank still wont deal with your LLC without your personal info…
thanks again and good luck in you future investments
Would you if you were the bank.
Just like with a person you would have to show the LLC has assests and a history that shows income/profit for at least 2 years.
Until you have a very large business why bother with all the cons that go with an LLC. Just 2 of them are higher cost for commerical loans and reuired commerical insurance.
MtnLand,
You probably won’t have any luck getting a loan in a corporate name (LLC or otherwise) without a personal guarantee. If you could, every lawyer would sell an incorporation package with the bankruptcy filing service.
Boblaw
why bother with an LLC? because cosigning (personally guaranteeing) a loan is VERY different from owning the property in your own name. The first obligates you on the loan. The latter makes you personally liable for everything that happens at the property, including lawsuits.
we live in a very litigious society and property owners are targets.
what about these places who sell coporations with all ready credit in place and credit cards for the coporation as well a line of credit in place for real estate investting of course they are not cheap iam sure but have heard they have up to 500,000.00 credit for investments in realestate i heard the cost is around 20,000.00 or more