Loan in LLC

I am just getting into the real estate business and I always hear that you should put your rentals in your business name. I was talking to my loan officer today and they told me that the loan had to be in my personal name why is this?

Thank you

The loan is required to be in your name because the lender wants you personally to be liable. If they have to foreclosure they can get more money out of a person than out of a business. Generally speaking, people will work harder when their name is attached to something rather than a business that is expendable.

GooD Luck! :beer

So do I just keep the loan in my name and then keep the property in my LLC

That’s how most people do it, but it does trigger the due on sales clause of the mortgage. However, it is very unlikely the bank will exercise its rights. I have only seen it happen a few times. The real problem is a transfer to the LLC in this situation is subject to the fraudulent transfer law and you risk having the whole thing undone if an excess judgment is ever rendered against you. Manging the property yourself also creates a way around the LLC.

My bank did everything in the name of the LLC, but I had to personally guarantee the loan with my name. So they still get theirs if anything ever happens, but the title is in the LLC’s name. This property is mortgaged by a small hometown bank, not a large chain.

Ok thank you for yalls help